ARGUMENT 


OF 


EVERETT  W.  BURDETT,  ESQ., 

ATTORNEY  OF  THE 

MASSACHUSETTS  ELECTEIC  LIGHTING  ASSOCIATION, 

1  1  <•  f  A  f  V 

'  nWrn 

AGAINST 


THE  PROPOSED  BILL  TO  ENABLE  CITIES  AND 
TOWNS  TO  OWN  AND  OPERATE  GAS  AND 
ELECTRIC  LIGHT  PLANTS  FOR  MUNICIPAL 
AND  COMMERCIAL  PURPOSES. 


COMMITTEE  ON  MANUFACTURES, 

MARCH  23  and  24,  1891. 


BOSTON: 

Press  of  Rockwell  and  Churchill. 
1891. 


Committee  on  Manufactures 


1891. 


Messrs.  James  W.  McDonald 
Aaron  Low  . 

H.  Torrey  Cady  . 

Of  the  Senate 


Michael  J.  Murray 

Fitchburg. 

Charles  H.  Baker 

Lynn. 

Eugene  M.  Mori  arty 

.  Worcester. 

John  W.  Fairbanks 

.  Westborough. 

Clarence  G.  Coburn 

.  Lowell. 

Daniel  R.  Child  . 

.  Swanzey. 

George  K.  Knowlton  . 

.  Hamilton. 

John  Golding 

.  Boston. 

Middlesex. 

Essex. 

Berkshire. 


Of  the  House 


CLOSING  ARGUMENT  OF  E.  W.  BURDETT,  ESQ. 

Mr.  Chairman  and  Gentlemen,  —  I  fully  appreciate  the 
patience,  courtesy,  and  fairness  which  this  committee  has  ex¬ 
hibited  towards  both  sides  throughout  this  investigation.  The 
hearings  have  been  extended,  not  to  say  tedious.  We  come  now 
to  a  portion  of  the  proceedings  which,  in  some  view,  may  be 
unnecessary,  and  therefore  all  the  more  tedious.  But  inasmuch 
as  it  is  always  the  rule  of  judicial  tribunals  that  a  jury  shall  not 
decide  a  case  until  after  all  the  evidence  is  in  and  the  arguments 
of  counsel  have  been  heard,  1  assume  that  this  tribunal,  not  less 
than  a  jury,  is  open  to  whatever  is  said  in  candor  and  fairness 
upon  the  propositions  which  are  involved. 


The  Proposed  Legislation. 


What  are  the  propositions  involved?  What  is  the  nature  of  the 
legislation  which  it  is  desired  to  engraft  upon  the  statute  books  of 
Massachusetts?  In  a  word,  it  may  be  stated  as  a  proposition  to 
allow  any  city  or  town  in  the  Commonwealth,  under  general 
legislative  permission,  without  reference  to  any  of  the  special  cir¬ 
cumstances  of  the  case,  to  engage  in  a  commercial  business,  — 
the  business  of  manufacturing,  distributing,  and  selling  gas  and 
electricity.  The  scope  of  the  proposition  is  so  broad  as  to  allow 
any  city  or  town  in  the  Commonwealth,  whatever  may  be  the  local 
conditions,  to  supply  those  two  commodities  for  a  triple  use ; 
namely,  for  lighting,  heating,  and  power.  Two  of  these  uses 
are  to-day  of  great  consequence.  The  electric  light  is  used,  as 
we  all  know,  to  a  very  extensive  degree.  The  generation  and 
transmission  of  electric  power  has  also  come  to  be  one  of  the, 
most  important  industries  in  our  more  thickly  settled  communities, 
and  is  growing  with  a  rapidity  which  no  one  appreciates  except 
those  in  actual  contact  with  the  business.  The  subject  of  supply¬ 
ing  heat  by  electricity  is,  so  far  as  I  know,  as  yet  undeveloped. 
But  for  the  important  and  immediate  objects  of  supplying  light 
and  power,  it  is  proposed  to  enable  all  or  any  of  the  municipali¬ 
ties  of  the  Commonwealth  to  furnish  either  gas  or  electricity. 
Not  only  so;  the  ambitious  bill  which  is  before  you,  and  the  only 


4 


one  which  is  under  consideration  for  the  present,  proposes  to  allow 
cities  and  towns  not  only  to  supply  themselves  and  their  inhabi¬ 
tants  with  these  products  for  the  purposes  named,  but  also  to 
supply  any  adjoining  city  or  town  and  the  inhabitants  thereof 
with  the  same  things  for  the  same  purposes.  The  scope  of 
this  legislation  will  be  found  in  sections  1  and  8  of  the  proposed 
law,  constituting,  as  I  think  I  can  fairly  and  soberly  say,  one  of 
the  most  sweeping,  one  of  the  most  dangerous,  and  one  of  the 
most  extraordinary  suggestions  of  legislation  which  could  be 
embodied  in  a  single  bill.  Under  its  provisions,  in  Boston,  for 
example,  the  municipal  “  manager  of  gas  and  electricity”  might 
have  the  entire  control  of  the  manufacture,  distribution,  and  sale 
of  all  the  gas  and  of  all  the  electricity  which  might  be  required 
for  light,  heat,  or  power,  not  only  in  the  city  of  Boston  and  to  its 
inhabitants,  but  in  no  less  than  six  adjoining  cities  and  ten 
adjoining  towns  and  to  the  inhabitants  thereof — in  all,  nearly  one 
million  people.  To  say  that  that  is  a  serious  proposition,  goes 
without  saying.  To  say  that  it  is  a  proposition  which  should  not 
be  accepted  without  the  most  plenary  proof  of  its  advisability, 
goes  without  saying.  It  is  a  step,  either  for  good  or  bad,  fraught 
with  the  most  momentous  consequences. 

The  Remonstrants. 

Who  remonstrate  against  this  legislation?  In  the  first  place, 
let  me  refer  to  the  remonstrants  whom  I  have  the  honor  to  repre¬ 
sent,  —  the  electric  lighting  companies.  There  are  in  active 
business  to-day  iu  Massachusetts  sixty-one  companies  engaged 
exclusively  in  the  manufacture  and  sale  of  electric  light  and 
power.  Invested  in  those  companies  is  capital  to  the  extent  of 
$5,452,025,  contributed  by  2,30  >  stockholders. 

All  this  investment  is  in  the  stock  of  the  corporations.  There 
is  also  invested  in  the  bonds  of  these  companies,  by  other  per¬ 
sons  than  the  2,300  I  have  referred  to,  $2,082,944 ;  making  a 
total  investment  in  the  stock  and  bonds  of  companies  exclusively 
engaged  in  the  electric  light  and  power  business  in  Massachusetts 
of  $7,534,969.  The  estimated  value  of  the  electric  lighting  de¬ 
partments  of  gas  companies,  a  list  of  which  may  be  found  on  pages 
42  and  43  of  the  last  report  of  the  Gas  and  Electric  Light  Com¬ 
missioners,  is  $1,193,538.  This  sum  increases  our  total  to 
$8,728,507.  But  that  is  not  all.  I  add  to  those  figures  the  sum 
of  $305,000,  the  amount  of  the  capital  invested  iu  two  cor- 


« 


o 


porations  under  lease  to  another,  which  are  not  included  in  the 
returns  of  the  latter,  and  which  do  not  themselves  make  returns. 
They  either  have  been  or  are  about  to  be  purchased  by  the 
company  to  which  they  have  heretofore  been  leased.  Adding 
their  capital  and  bonds  to  the  figures  above  given  from  the  report 
of  the  Gas  and  Electric  Light  Commissioners,  we  have  a  total 
investment  in  the  electric  lighting  and  power  business  of  Massa¬ 
chusetts,  on  the  30th  day  of  June,  1890,  of  $9,033,507. 

There  should  be  added  to  the  2.300  electric-light  stockholders  the 
number  of  stockholders  in  gas-light  corporations  in  the  Common¬ 
wealth,  amounting  to  4,725,  making  a  total  of  7,025  people  whose 
investments  are  directly  touched  by  the  legislation  which  is  pro¬ 
posed.  Nor  do  these  numbers  include  the  employees  of  the 
companies,  who  are  quite  a  considerable  number.  It  is  esti¬ 
mated  that  throughout  the  United  States  the  number  of  persons 
employed  by  electric-lighting  companies  is  upwards  of  300,000. 

General  Collins.  —  About  3,000  in  Boston  alone? 

Mr.  Burdett.  —  I  think  it  is  correct  that  in  Boston  alone  there 
are  about  3,000  persons  directly  dependent,  as  wage-earners,  upon 
the  electric  light  and  gas  industries.  In  this  same  connection 
I  ought  also  to  refer  to  another  fact,  which  is  important,  — 
that  there  are  a  number  of  other  industries  more  or  less  directly 
dependent  for  their  prosperity  and  success  upon  the  electric¬ 
lighting  industry.  Take  the  case  of  the  steam-engine.  Ten 
years  ago,  when  electric  lighting  started,  a  steam-engine  fit  for 
the  purpose  was  unknown.  It  has  been  because  of  the  demand 
of  electric-lighting  companies  for  engines  decidedly  superior  to 
those  which  used  to  be  considered  good  enough  for  other  purposes 
that  the  steam-eugine  has  received  its  wonderful  development  of 
the  last  ten  years.  Then  take  the  manufacture  of  carbons,  which 
are  used  exclusively  in  electric  lighting.  It  gives  employment  to 
a  great  many  people  and  puts  in  circulation  a  great  deal  of  money. 
Take  also  the  increased  consumption  of  copper,  iron,  coal,  and 
other  supplies,  arising  out  of  the  demands  of  the  electric-lighting 
industry,  and  the  aggregate  addition  to  the  business  of  the  coun¬ 
try  is  very  large. 

The  passage  of  the  legislation  contemplated  would  inevitably 
impair  existing  investments  in  all  these  lines  of  business,  and 
would  retard  if  not  prevent  their  future  development. 

I  was  much  struck,  Mr.  Chairman  and  gentlemen,  with  the 
statement  of  Mr.  Batchelder,  the  treasurer  of  the  Salem  Electric 


6 


Lighting  Company,  —  the  company  which  on  the  whole  seems  to 
have  been  more  successful,  according  to  the  returns,  than  any  other 
corporation  of  its  character  in  the  Commonwealth.  He  said,  “  We 
have  paid  dividends,  and  we  are  very  proud  of  it.  Our  dividends 
have  amounted,  on  the  average,  from  the  time  we  started,  to  seven 
per  cent.  But  in  order  to  get  an  average  of  seven  per  cent.,  upon 
one  occasion  we  divided  a  surplus  which  had  been  accumulating 
for  seven  or  eight  years. ,r  So  far  from  being  ashamed  of  the  fact 
that  he  and  other  business  men  in  Salem  had  put  their  money  into 
this  local  enterprise,  which  would  tend  for  the  good  of  the  com¬ 
munity  in  which  it  existed,  he  was  proud  of  it.  So  far  from 
apologizing  for  his  opposition  to  this  bill,  he  said  that  he  thought 
he  had  the  right  to  demand  protection  for  the  local  capital  in¬ 
vested  in  this  enterprise,  which  is  contributing  its  due  propor¬ 
tion  towards  sustaining  the  public  burdens.  If  that  be  true  of 
an  electric-lighting  company  in  Salem,  why  is  it  not  true  of  all  the 
electric-lighting  companies  in  Massachusetts?  Why  have  I 
not  the  light  to  say  that  the  $9,000,000  directly  invested  in  this 
business  within  the  last  ten  years,  contributing  its  due  proportion 
to  the  public  treasury,  should  have  the  right  to  look  to  you  for 
protection  instead  of  anticipating  hostile  action  at  your  hands? 

Now,  mind  you,  Mr.  Chairman,  if  it  were  true  that,  notwith¬ 
standing  what  I  have  said,  these  corporations  had  abused 
the  privileges  which  the  communities  had  given  them  ;  if  they; 
had  not  given  a  fair  equivalent  for  the  money  paid  them  ;  if 
they  could  be  justly  characterized  as  grasping  monopolies,  not 
entitled  to  the  reasonable  consideration  of  reasonable  men,  — 
much  of  the  force  of  what  I  have  to  say  would  be  broken. 
But  what  is  the  fact  about  it?  Look,  in  the  first  place,  into 
your  own  towns  and  cities,  —  and  I  make  the  statement  at 
large,  without  having  in  mind  any  particular  town  or  city,  — 
and  answer  yourselves  the  question,  whether  or  not  the  electric¬ 
lighting  companies  in  your  towns  or  cities  are  not  managed,  officered, 
and  owned  by  the  best  citizens  among  youY  constituents.  Where 
have  you  heard  of  scandals  in  the  administration  of  electric-light 
plants  in  Massachusetts?  Where  have  you  heard  anything  defi¬ 
nite  to  justify  the  cry  of  corruption  on  the  part  of  these  corpora¬ 
tions?  What  man  can  put  his  finger  upon  one  scintilla  of  proof 
of  that  outrageous  charge?  Not  one.  These  companies  have, 
you  will  admit,  performed  a  public  service  for  the  Commonwealth 
at  large,  and  for  the  different  cities  and  towns  in  which  they 


7 


/ 

exist ;  they  have  introduced  a  new  and  powerful  illuminant  to  your 
streets  ;  they  have  added  comfort  to  your  homes  ;  they  have  made 
it  easier  for  you  to  do  business ;  they  have,  in  a  sensible  degree, 
been  instrumental  in  the  prevention  of  crime  ;  they  have  appreci¬ 
ably  increased  the  taxable  valuation  of  your  property ;  they  have 
made  every  town  and  city  in  which  they  burn,  more  desirable  as 
a  place  of  residence,  and  more  advantageous  as  a  place  of  busi¬ 
ness.  They  have  not  been  monopolists  in  any  sense  of  the  word. 
What  is  a  monopoly  ?  Is  it  not  the  enjoyment  of  some  privilege 
from  which  others  are  excluded,  and,  in  the  popular  seuse,  from 
which  undue  profits  and  advantages  are  derived  ?  I  think  that  is 
a  fair  statement  of  it.  Does  that  definition  apply  in  any  sense  to 
the  electric-lighting  companies  in  Massachusetts?  Have  not  any 
three  of  us  the  right  to  organize  a  company  under  the  general  law? 
and  having  organized  that  company,  have  we  auy  privileges  which 
do  not  equally  belong  to  any  other  three  citizens  of  the  Common¬ 
wealth?  And  what  would  be  our  return,  in  case  we  did?  What 
has  been  the  return  to  the  public-spirited  citizens  who  have 
heretofore  put  their  money  into  this  enterprise?  Let  us  see. 
They  have  advanced  the  interests  of  the  Commonwealth  at  large, 
and  of  the  particular  cities  and  towns  in  which  they  are  estab¬ 
lished,  vastly  more  than  they  have  advanced  their  own.  And  for 
what  return? 

Profits  and  Dividends. 

Out  of  the  sixty-one  companies  in  active  business  in  Massachu¬ 
setts  on  the  30th  day  of  June,  1890,  only  twenty-two  of  them 
succeeded  in  paying  any  dividends  for  the  preceding  year.  Out 
of  the  fifty- six  companies  in  active  operation  the  year  before, 
only  fifteen  succeeded  in  paying  any  dividends. 

The  average  rate  of  dividends  paid  by  the  twenty- two  companies 
out  of  the  sixty-one  in  business  last  year  was  4.86  per  cent, 
for  each  company.  The  other  two-thirds  of  the  companies  paid 
no  dividend  at  all.  That  dividend,  when  divided  between  all 
the  companies  in  active  operation,  would  amount  to  only  If 
per  cent,  for  each  company.  But  it  may  be  said  that  that  is 
not  a  fair  statement  of  the  matter,  and  that  we  ought  to 
ascertain  the  rate  of  dividend  upon  the  whole  amount  of  capital 
employed.  Very  well;  let  us  do  so.  The  total  amount  paid 
in  dividends  equalled  only  2.8  per  cent,  on  the  total  amount  of 
the  capital  actually  invested. 


8 


But,  it  may  be  said,  or  intimated,  or  insinuated,  that  the  com¬ 
panies  are  keeping  back  a  portion  of  their  profits.  In  answer  to 
that,  I  will  say,  that  if  an  electric-lighting  compan}*  does  not  keep 
back  a  portion  of  its  profits,  but  pays  them  all  out  in  dividends,  it 
is  violating  the  first  principles  of  business.  No  man  would  have 
the  hardihood  to  stand  before  this  committee,  after  listening  to  the 
evidence  which  has  been  brought  out  here,  and  say  that  the  amount 
to  lay  by  for  contingencies,  depreciation,  surplus,  and  the  exigencies 
of  the  business,  ought  not  to  be  very  considerable ;  and  you  would 
say,  I  feel  sure,  that  if  the  companies  earned  ten  per  cent,  they 
would  not  be  justified  in  declaring  more  than  six  per  cent.  ;  that, 
at  least,  four  per  cent,  ought  to  be  retained  for  depreciation,  dam¬ 
ages,  contingencies,  and  other  expenses  of  that  character.  If  }tou 
will  take  the  report  of  the  Gas  and  Electric  Light  Commissioners 
to  which  I  have  referred  (the  last  report  which  has  been  pub¬ 
lished,  full  of  exact  and  complete  figures),  you  will  find  that 
the  total  amount  earned,  that  is,  the  total  net  profits  of  the  electric¬ 
lighting  companies  in  Massachusetts,  up  to  the  30th  day  of 
June,  1890,  amounted  to  only  0.3  per  cent,  upon  the  entire  amount 
of  capital  actually  invested.  Very  wisely,  very  properly,  very 
necessarily  they  have  retained  a  portion  of  the  net  earnings  for 
the  purpose  of  meeting  the  contingencies  to  which  I  have  referred, 
—  not  enough,  but  as  much  as  has  been  possible  under  existing 
conditions. 

There  has  been  one  very  unjust  thing  said  in  the  public  press 
during  the  time  that  these  hearings  have  been  in  progress  ;  so 
unjust  that  I  ought  to  call  attention  to  it,  because  it  has  had  a 
wider  circulation  than  anything  that  has  yet  been  said.  It  reads 
as  follows :  — 

“  E.  W.  Burdett,  attorney  for  the  electric  companies,  saj’s  that 
they  are  just  able  to  make  both  ends  meet,  and  does  not  want 
towns  on  that  account  to  go  into  the  business.  For  such  feeble 
concerns  they  manage  to  pay  large  dividends  and  support  a  large 
lobby  about  the  State  House.  The  baby  plea  will  hardly*  be 
accepted.  The  “Journal”  to-day  declares  against  municipal 
ownership.” 

There  is  just  one  grain  of  truth  in  that  bushel  of  chaff,  and 
that  is  that  the  “  Boston  Journal  ”  had  that  day  declared  against 
municipal  ownership.  But  I  did  not  know  of  it  until  I  read  it  in  this 
paper.  I  had  not  said  that  the  companies  are  just  able  to  make 
both  ends  meet ;  I  said  that  that  had  been  the  case  up  to  this  time. 


9 


These  companies  are  now  beginning  to  pay  dividends  upon  the 
capital  invested.  The  statement  that  “  for  such  feeble  concerns 
thejT  manage  to  pay  large  dividends  and  support  a  large  lobby  about 
the  State  House,”  ought  to  be  characterized  in  the  severest  terms. 
That  they  do  not  pay  large  dividends  is  shown  by  the  report  of 
the  Gas  and  Electric  Light  Commissioners,  made  up  of  sworn 
figures,  to  which  I  have  already  referred  ;  and  that  they  maintain 
a  lobby,  large  or  small,  at  the  State  House,  or  that  they  ever  have, 
is  absolutely  false. 

Mr.  Fairbanks.  —  Mr.  Burdett,  if  you  please,  where  was  that 
printed  ? 

Mr.  Burdett. — I  do  not  like,  unless  it  is  really  required,  to 
give  the  name  of  the  paper.  The  item  is  discreditable  to  it,  and 
unless  you  insist  I  would  rather  not  name  it.  I  should  like  to 
bury  that  statement.  But  I  will  give  it  to  you,  and  will  be  perfectly 
willing  to  do  so,  if  you  want  it,  any  of  you.  Everybody  has 
seen  it  in  the  public  press  of  Boston. 

The  Chairman.  —  It  is  a  Boston  paper,  is  it? 

Mr.  Burdett.  —  Yes,  sir. 

Objections. 

Now,  Mr.  Chairman,  why  do  these  corporations  object  to  the 
policy  which  I  have  indicated?  I  will  not  now  stop  to  state  the 
public  objections  ;  I  may  have  occasion  to  do  so  later  on  ;  but  for 
the  present  I  will  confine  myself  to  the  inquiry,  Why  do  these  pri¬ 
vate  corporations  object?  What  is  there  in  this  legislation  that  is 
necessarily  or  probably  injurious  to  their  interests?  It  is  because 
this  legislation,  if  passed,  will,  as  surely  as  the  sun  rises,  impair 
and  very  largely  destroy  their  investments.  You  may  think  that 
a  strong  statement ;  it  is  true  nevertheless.  Why  are  these  cor¬ 
porations  up  here  at  the  State  House,  represented  by  the  officers 
of  their  association  and  by  counsel,  if  they  do  not  appreciate  the 
vital  importance  of  the  issues  which  are  pending?  They  are 
the  best  judges  of  what  the  probable  effect  upon  their,  busi¬ 
ness  would  be,  and  their  action  is  sufficient  demonstration  of 
what  they  believe  it  would  be.  Let  me  give  you,  however,  some 
reasons  for  the  statement  that  it  would  impair  and  perhaps 
destroy  the  investments  of  private  capital  which  have  been  made. 

In  the  first  place,  it  would  absolutely  wipe  out  all  opportunity  to 
do  public  lighting.  A  city  or  town  going  into  this  business  would  light 
its  streets  and  public  buildings,  as  a  matter  of  course.  That  would 


i 


10 

deprive  many  of  the  local  companies  of  a  portion  of  their  revenue 
without  which  it  would  be  impossible  for  them  to  prosecute  their 
business  to  any  advantage  whatever.  In  the  second  place,  towns  and 
cities  not  being  corporations  organized  for  purposes  of  profit,  could, 
if  they  saw  fit,  compete  for  private  lighting  without  much,  if  any, 
reference  to  the  cost  of  production.  They  could  thus  not  only  de¬ 
prive  the  corporations  of  a  large  portion  of  their  revenue,  but 
could  cripple  them  in  the  prosecution  of  other  branches  of  their 
business.  Under  such  circumstances,  it  would  be  impossible  for 
the  company  to  compete  with  any  satisfaction.  In  the  third  place, 
think  of  the  idea  of  a  private  corporation  competing  with  a  munic¬ 
ipal  corporation,  when  the  former  is  wholly  dependent  upon  the 
latter  for  its  rights  in  the  public  streets.  Not  only  must  the  cor¬ 
poration  obtain  its  locations  for  poles  and  wires,  and  its  permits 
for  digging  up  the  streets,  by  the  leave  of  the  public  bodies  who 
are,  under  the  proposed  legislation,  to  be  allowed  to  prosecute  the 
same  business  in  competition  ;  but  there  are  pending  before  this 
Legislature  to-day  numerous  propositions  to  further  enlarge  the 
powers  of  municipalities  in  the  matter  of  their  control  of  the 
rights  and  privileges  of  these  private  companies.  In  the  fourth 
place,  the  existence  or  the  possibility  of  such  unfair  conditions 
would  discourage  enterprise  and  drive  capital  out  of  the  business. 
No  man  of  business  sense  would  for  a  moment  think  of  investing 
his  money  in  a  private  lighting  plant  run  in  competition  with  a 
town  or  city  in  which  it  existed.  Not  only  that,  but  no  man  who 
had  stock  in  such  a  corporation  but  would  get  rid  of  it  upon  any 
terms  procurable. 

But,  finally,  and  perhaps  more  important  than  anything  else,  is 
the  outrageous  power  of  municipal  confiscation  which  is  embodied  in 
the  bill  before  you,  —  embodied  in  the  bill  which  was  under  consid¬ 
eration  last  year,  and  embodied  in  every  bill  presented  by  the  “  na¬ 
tionalists.”  They  care  nothing  for  invested  capital.  When  people 
get  capital  to  invest,  they  ordinarily  cease  to  be  44  nationalists.”  I 
refer  especially  to  sections  13,  14,  and  15  of  the  bill  pending  before 
you,  which  practically  legalize  spoliation.  The  onty  redeeming  feat¬ 
ure  of  a  municipal  ownership  bill  would  be  a  fair  and  reasonable  pro¬ 
vision  for  the  purchase  of  existing  private  plants.  I  do  not  mean 
to  say  that  that  would  remove  all  objection.  Far  from  it.  I  do 
not  mean  to  say  that  that  would  constitute  a  reason  why  the 
legislation  could  in  fairness  be  passed  ;  but  I  sa}’  it  would  be  the 
only  redeeming  feature  in  an  otherwise  absolutely  objection- 


11 


able  proposition.  The  bill  which  was  first  passed  by  the  House 
of  last  year  was  idenlical  in  terms  with  that  submitted  by  the 
nationalists  to  the  committee  and  unanimously  rejected  by  the 
committee.  It  contained  no  provision  whatever  for  the  purchase 
of  existing  plants  by  the  municipalities  availing  themselves  of  the 
provisions  of  the  act.  This  feature  was  so  manifestly  unjust  and 
oppressive,  practically  legalizing  spoliation,  that  an  amendment 
was  adopted  which  in  some  measure  met  that  objection.  It  will 
be  found  in  House  Document  No.  550  of  last  year.  It  was  as 
follows  :  — 

Section  13.  If  in  any  city  or  town  there  exists  at  the  time  of  the 
passage  of  this  act,  gas  or  electric  light  plants,  owned  and  operated  by 
persons  or  corporations  acting  under  the  laws  of  this  Commonwealth, 
such  plants  shall  be  purchased  by  said  cities  and  towns,  in  the  manner 
provided  in  this  section,  before  such  cities  and  towns  establish  a  sys¬ 
tem  of  lighting  under  this  act.  The  price  to  be  paid  therefor  shall  be 
the  actual  cash  value  of  the  property  owned  by  said  persons  or  corpora¬ 
tions,  and  no  privileges,  rights,  or  immunities  theretofore  given  to  said 
persons  or  corporations  by  said  cities  or  towns  or  by  the  laws  of  the 
Commonwealth  shall  be  deemed  to  be  the  property  of  said  persons  or 
corporations  within  the  meaning  of  this  section.  The  value  of  said 
existing  plants  for  this  purpose  shall  be  fixed  by  a  board  of  three 
persons,  one  to  be  chosen  by  the  person  or  corporation  owning  such 
plants,  one  by  the  city  or  town  in  interest,  and  one  by  the  two  thus 
selected.  Their  decision  shall  be  final  when  accepted  by  said  city  or 
town.  No  town  or  city  shall  establish  a  gas  or  electric  light  plant 
under  the  provisions  of  this  act  until  it  shall  have  acquired  under  the 
provisions  of  this  section  such  plant  as  shall  exist  in  such  city  or  town 
at  the  time  of  the  passage  of  this  act. . 

It  will  be  seen  that  this  amendment  contained  some  elements 
of  fairness.  The  price  to  be  paid  for  the  local  plant  was  “the 
actual  cash  value  of  the  property,”  without  any  allowance  for 
“  privileges,  rights,  or  immunities”  received  from  the  city  or  town 
or  from  the  Commonwealth,  and  the  valuation  was  to  be  arrived  at 
by  an  impartial  appraisal. 

This  amendment  constituted  the  only  redeeming  feature  of  the 
bill,  but  was  almost  immediately  stricken  out,  and  sections  13,  14, 
and  15;  as  they  stand  in  the  bill  before  you  (House  Document 
573  of  1890),  were  substituted  therefor.  These  new  sections, 
instead  of  remedying  the  unjust  and  spoliative  character  of  the 
nationalists’  bill,  aggravated  its  objectionable  features  and  made 


< 


12 

them  worse  than  before.  The\T  involve  so  momentous  an  issue  to 
the  corporations  which  I  represent  that  you  will  pardon  me  in  a 
brief  analysis  of  them. 

In  the  first  place,  the  plants  to  be  purchased  by  the  cities  or 
towns  availing  themselves  of  the  provisions  of  the  act  are  con¬ 
fined  by  section  13  to  those  existing  at  the  time  of  the  first  vote  of 
the  said  city  or  town  looking  to  municipal  ownership.  This  would 
necessitate  the  local  company  standing  still  until  the  matter  was 
again  voted  upon  in  the  following  year.  Whatever  additions  or 
improvements  were  made  after  the  first  vote  and  before  the  final 
taking  by  the  town  or  city  could  not  be  sold  under  the  provisions 
of  the  act.  On  the  other  hand,  if  the  final  vote  of  the  city  or  town  as 
to  going  into  the  business  should  be  adverse  to  the  first,  the  com¬ 
pany  would  have  been  handicapped  and  impeded  in  the  prosecu¬ 
tion  and  extension  of  its  business  without  any  compensation 
therefor.  It  would  be  difficult  to  frame  a  law  more  discouraging 
to  business  enterprise  or  more  hindering  to  legitimate  industry. 

But  the  most  oppressive  feature  of  section  13  is  the  provision 
that  the  city  or  town  shall  purchase  “only  such  property  as  by 
reason  of  its  being  real  estate  or  attached  to  real  estate  cannot  be 
removed  and  be  available  elsewhere  without  material  loss,  injury, 
or  expense.”  This  would  not  include  wires,  lamps,  and  fixtures 
(the  most  expensive  part  of  the  equipment  of  an  electric-light 
company)  or  the  dynamo-electric  machines,  which  are  movable, 
—  in  fact,  nothing  but  the  company’s  land,  buildings,  poles,  set 
boilers,  and  such  other  items  (if  any)  as  are  “  attached  to  real 
estate.”  Under  this  provision  the  company  would  be  obliged  to  sell 
one  part  of  its  plant,  and  thereby  ruin  the  value  of  the  other  part. 
No  provision  is  made  in  the  bill  for  the  cost  of  taking  down  the 
wires,  lamps,  and  fixtures  and  removing  the  electrical  machines, 
which,  when  so  taken  down  and  removed,  would  be  second-hand. 
In  the  absence  of  any  further  opportunity  to  use  them,  they 
would  be  little  less  than  junk  in  the  hands  of  their  owners. 
This  feature  of  the  bill  is  unqualifiedly  and  outrageously  bad. 
The  bill  might  as  well  be  left  as  drawn  by  the  nationalists,  with¬ 
out  any  provision  to  prevent  the  destruction  of  the  value  of  exist¬ 
ing  plants,  as  to  put  in  such  a  partial,  one-sided,  and  unjust 
provision  as  that  referred  to.  It  would,  in  practice,  amount  to 
little  less  than  confiscation. 

Contrast  with  this  feature  of  the  bill  the  provisions  of  the 
municipal  water  act  in  our  statutes  (Pub.  Stats.,  ch.  27, 


( 


13 


sect.  27)  permitting  a  municipality  to  purchase  from  a  private 
water  company  “  its  whole  water  rights,  estates,  franchises,  and 
privileges,  and  thereby  become  entitled  to  all  the  rights  and 
privileges  and  subject  to  all  the  duties  and  liabilities  of  said 
corporation.” 

In  the  third  place,  section  13  gives  the  city  or  town  the  option 
to  purchase  the  local  company’s  gas  plant  or  its  electric  plant, 
according  as  the  city  or  town  has  decided  to  go  into  the  gas  or 
electric  light  business.  In  other  words,  a  company  engaged  in 
furnishing  both  gas  and  electricity  (as  many  companies  are) 
would  practically  be  compelled  to  split  its  business  in  two,  re¬ 
taining  only  that  portion  which  the  municipality  does  not  elect  to 
take.  With  a  considerable  part  of  the  -property  formerly  in  use 
by  it  rendered  second-hand  and  incapable  of  use  except  elsewhere, 
and  with  its  business  split  in  two,  such  a  company  would  find  it 
difficult,  if  not  impossible,  to  ward  off  bankruptcy. 

Have  the  gas  and  electric  companies  of  Massachusetts  done 
anything  to  deserve  such  treatment  at  the  hands  of  the  Legisla¬ 
ture?  On  the  contrary,  they  have  established  a  new  and  useful 
industry,  requiring  the  investment  of  millions  of  money,  and  the 
employment  of  thousands  of  men  ;  and,  by  so  doing,  have  contrib¬ 
uted  both  to  the  comfort  and  luxury  of  life,  and  to  the  prosperity 
of  the  communities  in  which  they  do  business. 

Contrast  with  this  provision  that  of  the  English  electric- lighting 
act  of  1882,  as  amended  by  the  Act  of  1888,  which  provides  that 
if,  upon  the  expiration  of  the  forty-two  years  in  which  the  corpora¬ 
tion  has  the  right  to  prosecute  its  business  undisturbed  by  the  mu¬ 
nicipality,  the  latter  elects  to  purchase  it,  it  must  purchase  all  the 
property  of  the  company  within  its  territorial  limits,  and  in  case 
it  does  not  purchase  that  part,  if  any,  which  lies  outside  its  limits, 
it  must  pay  for  “  any  loss  occasioned  by  severance.” 

Sections  14  and  15  merely  relate  to  the  details  of  carrying  out 
the  provisions  of  section  13;  unless  the  provisions  of  the  latter 
portion  of  section  14,  which  are  very  awkwardly  expressed,  are 
held  to  mean  that  the  purchasing  city  or  town  has  the  further 
option  to  purchase  any  part  or  parts  of  existing  plants  in  addition 
to  the  portion  designated  section  13. 

Without  further  comment  on  m3'  part,  I  think  that  the  inequi¬ 
table,  unfair,  and  unbusiness-like  character  of  the  propositions 
involved  in  these  sections  will  be  at  once  appreciated  by  the  com¬ 
mittee.  I  cannot  believe  that  a  single  one  of  you  is  so  unfair  as  to 


14 


desire  to  put  upon  the  statute  book  a  law  which  will  operate  as  I 
have  indicated  this  would  do. 

In  contrast  to  the  proposed  legislation  I  ask  you  to  look  at  the 
provisions  of  our  statutes  enabling  towns  to  buy  water  plants,  to 
which  I  have  already  called  attention.  It  contains  no  such  out¬ 
rageous  provision  as  that  to  which  I  have  just  referred.  It 
provides  that  a  town  “  may,  for  the  purpose  of  supplying  water 
to  its  inhabitants,  purchase  of  any  municipal  or  other  corporation, 
the  right  to  take  water  from  an}'  of  its  sources  of  supply,  or  from 
pipes  leading  therefrom  ;  or  may  purchase  its  whole  water  rights, 
estates,  franchises,  and  privileges,  and  thereby  become  entitled  to 
all  the  rights  and  privileges  and  subject  to  all  the  duties  and 
liabilities  of  said  corporation  ;  or  may  make  a  contract  therewith 
for  a  supply  of  water.” 

Ever  since  the  formation  of  the  constitution  of  our  State  water 
companies  have  been  organized  here  and  there.  These  water 
acts,  if  I  remember  rightly,  date  back  to  1794  or  179G,  —  cer¬ 
tainly  quite  a  number  were  passed  before  the  beginning  of  this 
century.  From  that  time  down  they  have  been  increasing  in 
number,  until,  finally,  within  the  last  ten  or  twenty  years,  the 
number  has  grown  to  be  enormous.  There  have  been,  in  the  last 
twenty-five  or  thirty  years,  a  great  many  acts  passed,  enabling 
cities  and  towns  to  own  and  operate  water  plants.  But  as  old  as 
that  subject  is,  there  has  never  yet  been  put  upon  the  statute  book 
a  general  law  permitting  towns  and  cities  to  enter  upon  the  supply 
of  water  to  its  inhabitants,  except  as  just  stated.  The  Legislature 
has  required  every  town  and  city  desiring  to  do  so  to  make  special 
application,  and  show  special  reasons  why  the  application  should  be 
granted,  except  that  it  has  allowed  them,  without  special  legislative 
permission,  to  purchase  existing  private  water  plants.  That  is 
the  only  way,  to-day,  by  which  a  town  can  go  into  the  supply  of 
water  where  a  private  company  already  exists.  And  I  remember 
very  well  that  Mr.  Russell,  the  present  Governor  of  the  Common¬ 
wealth,  in  his  argument  before  this  committee  two  years  ago,  said 
that,  so  far  as  his  investigations  went,  there  had  never  been  a 
case  where  a  city  or  town  had  been  allowed  to  go  into  the  water 
business  where  private  capital  was  already  invested.  I  have  not 
had  an  opportunity  to  investigate  that  myself,  but  I  take  the 
statement  from  Mr.  Russell’s  printed  argument. 

Now,  in  England,  they  have  an  electric-light  law,  passed  in 
1882  and  amended  in  1888.  I  understand  it  to  have  been  drawn 


15 


by,  or  under  the  direction  of,  Mr.  John  Chamberlain,  an  English 
statesman  who  is  said  to  have  no  partiality  for  private  corpora¬ 
tions.  I  am  informed  that,  at  the  time  the  act  was  passed,  he  was 
president  of  the  Board  of  Trade.  This  act  will  be  found  in  45  & 
46  Victoria,  chapter  56,  section  27  (1882),  amended  by  51  &  52 
Victoria,  chapter  12,  section  2  (1888).  What  do  these  acts 
provide?  Acts  drawn  as  carefully  as  such  acts  are  drawn  in 
England  are  well  worth  our  careful  consideration.  In  the  first 
place,  they  do  not  allow  a  city  or  town  in  which  a  private 
plant  is  established  to  act  upon  the  question  of  its  purchase  until 
after  the  local  company  has  had  forty-two  years’  opportunity  to 
get  its  money  out  of  the  enterprise.  the  law  of  1882  it  was 
twenty-one  years,  but  by  the  law  of  1888  it  was  made  forty-two 
years.  And  if  the  town  fails  to  vote  to  purchase,  within  six 
months  after  the  expiration  of  the  forty-two  years,  it  must  wait 
ten  years  longer  before  it  can  again  avail  itself  of  the  right  to 
purchase.  This  gives  some  security  to  capital,  aud  encourages 
its  investment. 

If  the  municipality  buys,  what  must  it  buy?  It  must  buy  all 
the  plant  and  property  within  the  town  or  city,  at  “  their  fair 
market  value  at  the  time  of  the  purchase,  due  regard  being  had  to 
the  nature  and  then  condition  of  such  buildings,  works,  materials, 
and  plant,  and  to  the  state  of  repair  thereof,  and  to  the  circum¬ 
stance  that  they  are  in  such  a  position  as  to  be  ready  for  immediate 
working,  and  to  the  suitability  of  the  same  to  the  purposes  of  the 
undertaking,  and,  where  a  part  only  of  the  undertaking  is  pur¬ 
chased  [that  is,  where  the  city  or  town  does  not  purchase  that  part 
of  the  property  which  lies  without  its  limits],  to  any  loss  occasioned 
by  severance ;  but  without  any  addition  in  respect  of  compulsory 
purchase  or  of  good-will,  or  of  an}r  profits  which  may  or  might 
have  been  or  be  made  from  the  undertaking,  or  of  any  similar  con¬ 
siderations.”  That  is.  a  fair  and  reasonable  provision.  In  case  of 
disagreement,  the  appraisal  is  to  be  made  by  arbitration. 

People  who  are  willing  to  invest  their  money  in  this  enterprise 
in  Massachusetts  ought  to  have  some  assurance  that,  for  at  least  a 
few  years,  they  will  not  be  obstructed  in  their  business  and  will 
not  be  liable  to  municipal  interference.  That  would  be  a  valuable 
safeguard,  and  it  is  one  which  the  companies  might  reasonably 
ask  the  Legislature  to  grant  them. 

So  much,  in  brief,  for  the  private  objections.  Now  for  some  of 


16 


I 


the  objections  of  a  public  nature.  You  must  consider  both.  You 
have,  I  think,  no  more  right  to  disregard  one  than  the  other. 

Public  Objections. 

I  will  not  attempt  to  state  all  of  the  objections  which  can  be 
raised  to  the  proposed  legislation  from  the  stand-point  of  public 
policy,  but  only  a  few  of  them. 

You  have  had  before  you  private  citizens,  as  respectable  and  re¬ 
sponsible  as  any  in  the  communities  from  which  they  come,  who,  with 
entire  disinterestedness,  have  stated  their  objections  as  citizens. 
From  Peabody  you  had  two  presidents  of  national  banks,  one  pres¬ 
ident  of  a  savings  bank,  one  lawyer,  one  merchant,  and  one  minis¬ 
ter.  From  Boston,  I  understand,  you  had  Mr.  Cotting  the  other 
day,  as  conservative  an  investor  and  custodian  of  property  as  the 
city  of  Boston  contains.  He  put  it  right.  I  read  his  testimony 
this  morning.  No  matter  how  the  questions  were  put  to  him,  he 
had  the  fundamental  idea  all  the  way  through,  that  the  distinction 
between  water  on  the  one  hand,  and  gas  and  electric  light  on  the 
other,  was  the  distinction  between  a  natural  article,  necessary  for 
everybody,  and  a  manufactured  article  of  commerce.  I  will  have 
occasion  to  refer  a  little  later  on  to  this  distinction  —  the  dif¬ 
ference  between  the  municipal  distribution  to  citizens  of  that  which 
public  necessity  requires  for  the  health  of  the  community  at  large, 
and  the  prosecution  of  the  business  of  manufacturing  and  selling 
an  article  of  commerce,  which  is  at  most  a  convenience  and  is 
usually  a  luxury. 

The  municipal  supply  of  water  is  within  the  proper  scope  of 
municipal  administration  ;  but  the  commercial  supply  of  gas  and 
electric  light  revolutionizes  all  our  ideas  of  the  true  functions  of 
town  or  city  governments  in  Massachusetts. 

In  this  connection  I  have  a  right  to  refer,  I  think,  to  a  state¬ 
ment  by  a  gentleman  who,  though  now  removed  from  private 
practice,  would  not  utter  as  an  attorney  views  of  public  questions 
which  he  did  not  entertain  as  an  individual.  A  little  less  than 
two  years  ago,  before  this  same  committee,  when  the  various  prop¬ 
ositions  for  municipal  ownership  of  lighting  industries  had  been 
fairly  stated,  Hon.  Wm.  E.  Russell  said:  “  The  matter  now  fairly 
before  the  committee  involves  a  most  serious  question  of  public 
polhty,  namely,  whether  it  is  wise,  necessary,  and  safe  to  reverse 
the  policy  that  has  governed  towns  and  cities  in  this  Common¬ 
wealth  for  two  hundred  and  fifty  years,  and  allow  them  to  go 


( 


17 


into  these  enterprises  with  all  the  hazards,  risks,  and  liabilities 
that  attend  the  investment  of  money  in  private  industry?”  There 
is  as  succinct  a  statement  of  the  question  before  you  as  could  well 
be  made. 

The  lawj’ers  on  the  committee,  periiaps,  more  than  the  laymen, 
will  attach  great  importance  to  what  our  judiciary  have  pointed 
out  as  the  proper  province  of  town  and  city  governments  in 
Massachusetts ;  and  I  would  like  to  call  the  attention  of  such  to 
the  utterance  of  Mr.  Justice  Wilde,  in  11  Pick.,  399,  in  which 
he  expressed  the  views  of  the  Supreme  Court  of  Massachusetts 
as  at  that  time  constituted.  Speaking  of  the  limitation  upon  the 
powers  of  town  governments  he  said  :  — 

“  This  limitation  upon  the  power  and  authority  of  towns  to 
enter  into  contracts  and  stipulations  is  a  wise  and  salutary  provi¬ 
sion  of  law,  not  only  as  it  protects  the  i  ights  and  interests  of  the 
minority  of  the  legal  voters,  but  as  it  may  not  unfrequently  prove 
beneficial  to  the  interests  of  the  majority,  who  may  be  hurried  into 
rash  and  unprofitable  speculations  by  some  popular  and  delusive 
excitement,  to  the  influence  of  which  even  wise  and  considerate 
men  are  sometime  liable.” 

What  apter  language  could  be  used  to  characterize  the  present 
situation? 

Chief  Justice  Shaw  said  something  which  is  worth  repeating  in 
this  connection,  in  a  case  reported  in  23  Pick.,  75.  Referring  to 
the  individual  liability  of  every  citizen  for  the  debts  of  the  munic¬ 
ipality  in  which  he  lives,  he  says :  — 

“It  is  obvious,  therefore,  that  if  this  liability  were  to  extend  to 
unlimited  and  indefinite  objects,  the  citizen,  b}r  being  a  member  of 
a  corporation,  might  be  deprived  of  his  most  valuable  personal 
rights  and  liberties.  The  security  against  this  danger  is  in  a 
steady  adherence  to  the  principle  stated,  that  corporations  can 
only  exercise  their  powers  over  their  respective  members  for  the 
accomplishment  of  limited  and  well-defined  objects.” 

Let  me  refer  again  to  the  argument  of  the  gentleman  whom  I 
first  quoted.  He  read  with  entire  approval  the  following  extract 
from  the  great  work  of  Judge  Dillon  on  Municipal  Corpora¬ 
tions  :  — 

fct  To  clothe  them  with  powers  to  accomplish  purposes  which 
can  better  be  left  to  private  enterprise,  is  unwise.  Their  chief 
function  should  be  to  regulate  and  govern.  To  invest  them  with 
the  powers  of  individuals  or  private  corporations,  for  objects  not 


18 


pertaining  to  municipal  rule,  is  to  pervert  the  institution  from  its 
legitimate  ends,  and  to  require  of  it  duties  it  is  not  adapted  satis¬ 
factorily  to  execute.” 

And  after  further  consideration,  Mr  Russell  expressed  his  con¬ 
clusions  in  words  so  apt  and  eloquent  that  it  is  a  delight  to  quote 
them.  He  said  :  — 

“  I  am  one  of  those  who  believe  that  it  is  the  duty  of  govern¬ 
ment  not  to  crush  out  individual  enterprise  and  energy,  but  to  aid 
it.  I  believe  in  the  principle  of  government  helping  men  to  make 
the  most  of  themselves,  and  industries  to  make  the  most  of  them¬ 
selves,  but  not  in  a  paternal  government  to  which  we  must  all 
look  for  leave  to  act  or  think  or  speak.  And  I  believe  on  that 
principle  it  is  of  doubtful  expediency  for  a  State  or  a  government 
to  undertake  to  control  in  this  way  private  enterprises.” 

And  I  do  not  think  that  there  is  a  thing  inconsistent  with  that 
statement  in  his  inaugural  address  as  Governor  to  the  present 
Legislature.  Referring  to  the  enlargement  of  the  powers  of 
cities  and  towns,  he  says  he  thinks  that  such  enlargement 
may  be  made  to  advantage,  and  then  adds:  “I  therefore 
commend  to  your  consideration  the  subject  of  enlarging  their 
powers  by  general  laws,  especially  in  matters  of  taxation, 
franchises,  municipal  control  of  municipal  work,  and  ownership 
of  the  instrumentalities  for  its  performance.”  This  statement 
may  perhaps  bear  the  construction  that  towns  and  cities  may 
be  safely  allowed  to  light  their  own  streets  and  public  build¬ 
ings,  but  it  is  entirely  consistent  with  its  author’s  former  uncom¬ 
promising  opposition  to  allowing  municipalities  to  go  into  the 
business  of  manufacturing  gas  and  electricity  for  sale  for  com¬ 
mercial  purposes. 

The  position  of  our  Supreme  Court  upon  this  question  must  not 
be  misunderstood.  Last  year  the  House  asked  the  opinion  of  the 
Court  as  to  the  constitutional  power  of  the  Legislature  to  pass  laws 
enabling  cities  and  towns  to  manufacture  gas  and  electricity,  first, 
for  their  own  use,  and,  second,  for  sale  to  private  customers. 
After  consideration  the  Court  concludes  as  to  the  first  question,  as 
follows  :  — 

41  As  a  question  of  constitutional  power ,  we  cannot  distinguish  the 
right  to  authorize  cities  and  towns  to  buy  gas  or  electricity  for  their 
use,  from  the  right  to  authorize  them  to  manufacture  it  for  their 
use.  We  therefore  answer  the  first  question  in  the  affirma¬ 
tive.” 


< 


19 


The  question  of  the  Legislature’s  constitutional  power  was  the 
only  question  with  which  they  had  to  deal,  and  they  found  in  the 
constitution  what  they  deemed  to  be  sufficient  authority  to  enable 
the  Legislature  to  act,  if  it  saw  fit  to  do  so. 

Upon  the  second  question,  they  found,  as  they  say,  more  diffi¬ 
culty.  They  finally,  however,  reached  the  following  conclu¬ 
sion  :  — 

“  If  the  Legislature  is  of  opinion  that  the  common  convenience 
and  welfare  of  the  inhabitants  of  cities  or  towns  will  be  promoted 
by  conferring  upon  the  municipalities  the  power  of  manufacturing 
and  distributing  gas  or  electricity  for  the  purpose  of  furnishing 
light  to  their  inhabitants,  we  think  that  the  Legislature  can  confer 
the  power.  We  therefore  answer  the  second  question  in  the 
affirmative.” 

I  call  attention  to  this  opinion  of  the  justices  for  the  purpose  of 
disabusing  your  minds  of  any  impression  that  it  contains  in  it 
anything  in  the  nature  of  justification  of  the  legislation  except 
upon  constitutional  grounds. 

I  would  be  considered  entirely  lacking  in  a  proper  view  of  the 
appropriate  scope  of  an  argument  upon  this  subject,  if  I  did  not 
refer  to  the  analogy  which  is  so  often  claimed  to  exist,  that  is,  the 
alleged  analogy  of  water-supply. 

The  Analogy  of  Water-Supply. 

There  are  various  other  analogies,  such  as  street-building, 
sewer-building,  maintaining  public  schools,  and  so  forth,  which  I 
find,  according  to  the  stenographer’s  notes,  were  referred  to  at  the 
last  hearing.  But  they  are  all  easily  distinguishable  from  the 
present  proposed  legislation.  I  will  not  discuss  them,  because  I 
have  not  time.  I  discussed  them  fully  last  year,  and  can  furnish 
a  copy  of  my  argument  to  anybody  who  may  be  interested  in  that 
branch  of  the  discussion.  The  foundations  upon  which  those 
powers  rest  are  wholly  different  from  those  which  underlie  the 
legislation  which  is  now  proposed. 

The  analog}’  of  water  is  admitted  to  be  the  most  favorable 
analogy  for  the  other  side.  It  is  the  analogy  that  is  always  urged. 
If  it  does  not  hold,  then,  confessedly,  none  of  the  others  hold. 
There  are  numerous  natural  differences,  to  which  I  will  merely 
refer.  Water  is  a  natural  product;  gas  aud  electricity  are  not. 
Water  is  generally  taken  from  great  ponds,  so  called,  where  every 
citizen  has  a  right  to  go  with  his  bucket  and  carry  away  as  much 


20 


water  as  he  pleases.  The  supply  of  water  is  merely  the  distribu¬ 
tion  of  a  natural  commodit}',  which  has  none  of  the  ear-marks  of 
a  manufactured  product.  It  does  not  partake  in  any  measure  of 
the  subtle  and  peculiar  nature  of  gas  or  electricity.  But  passing 
these  natural  differences*  let  us  come  to  the  essential  differences. 

In  the  first  place,  the  supply  of  water  is  indispensable  to  the 
performance  of  certain  strictly  municipal  functions  ;  for  example, 
the  extinguishment  of  fires.  That  has  been  held  by  our  Courts  to 
be  a  function  which  cities  and  towns  are  under  obligation  to 
perform.  But,  on  the  contrary,  our  Supreme  Court  has  held, 
and  that  decision  has  never  been  overruled  or  questioned,  that 
there  is  no  legal  obligation  upon  a  city  or  town  to  light  its  streets. 
There  is,  therefore,  no  analogy  between  the  furnishing  of  water  in 
the  performance  of  certain  indispensable  municipal  functions,  and 
the  furnishing  of  gas  or  electricity,  which  cities  and  towns  are 
under  no  obligation  to  furnish,  even  to  travellers  upon  their  high¬ 
ways. 

In  the  second  place,  to  supply  water  to  every  individual  of  a 
town  or  city  is  in  itself  the  performance  of  a  public  function 
which  can  be  performed  in  no  other  way.  The  necessity  of  every 
citizen  to  have  pure  water  in  abundance  is  such  that  a  city  or 
town  that  failed  to  furnish  it  to  him  at  reasonable  rates  and  in  the 
best  possible  manner  would  fail  in  the  performance  of  one  of  the 
most  essential  functions  of  civil  government. 

In  the  third  place,  the  supply  of  water  almost  always  necessa¬ 
rily  involves  the  exercise  of  the  right  of  eminent  domain.  This  is 
a  very  important  distinction,  which  is  indicated  in  the  opinion  of 
the  justices,  to  which  reference  has  been  made.  A  water  com¬ 
pany,  in  order  to  get  to  its  customers  from  its  reservoirs  or 
sources  of  supply,  must  almost  always  go  through  private  land, 
and  must  therefore  almost  necessarily  exercise  the  right  of  emi¬ 
nent  domain, — the  highest  right  enjoyed,  under  our  form  of  gov¬ 
ernment,  by  sovereignty  itself,  except  the  right  to  tax,  to  which  it 
is  analogous.  For  that  reason,  water  is  more  properly  supplied 
by  towns  and  cities,  because  it  is  more  proper  that  towns  and 
cities  should  exercise  this  great  right  of  eminent  domain  than 
that  private  corporations  should  do  so. 

The  fourth  distinction  is  also  one  hinted  at  in  the  opinion  of  the 
justices.  It  is,  that  a  supply  of  pure  water  can  sometimes  be 
furnished  in  no  other  way  than  by  the  exercise  of  public  rights ; 
whereas,  everything  goes  to  show  that  no  man  in  this  Common- 


21 


wealth,  and  no  community  in  this  Commonwealth,  needs  to  go 
without  lights  if  willing  to  pay  for  them. 

But  to  come  to  the  gist  of  the  matter  and  to  the  main  differ¬ 
ence  :  water  is  indispensable  to  the  health  and  welfare  of  the  com - 
rnunity  at  large.  An}"  city  or  town  which  does  not  see  to  it  that  a 
supply  of  pure  water  is  furnished  to  its  inhabitants,  has  failed,  as 
I  have  said,  in  the  performance  of  one  of  the  first  functions  of 
civil  government.  Artificial  light  is  not  essential  to  the  health  or 
to  the  life  of  the  members  of  the  community.  It  is  at  best  a  con¬ 
venience,  ordinarily  a  luxury,  never  ail  absolute  necessity. 

So  that  if  any  man  will  candidly  and  judicially  examine  into  the 
foundations  of  the  right  of  a  municipality  to  supply  itself  with 
water,  and  compare  those  foundations  with  those  which  must 
underlie  the  right  to  supply  artificial  light,  he  cannot  fail  to  come 
to  the  conclusion  that  no  analogy  exists  between  them.  There  is 
a  fundamental  difference  between  supplying  an  absolute  necessity 
in  the  performance  of  a  public  function,  and  the  voluntary  manu¬ 
facture  and  sale  of  an  article  of  commerce. 

The  analogy  runs  the  other  way.  The  analogy  from  electric 
lights  and  gas  is  to  street  railroads,  telephones,  express  companies, 
cab  service,  union  depots,  hotels,  the  manufacture  of  boots,  shoes, 
or  blankets,  the  sale  of  groceries,  and  the  like. 

Massachusetts  has  never  heretofore  permitted  its  cities  and 
towns  to  indulge  in  any  business  speculations  or  manufacturing  en¬ 
terprises.  The  nearest  she  has  ever  come  to  committing  that  mis¬ 
take  was  in  permitting  its  towns  and  cities  to  give  aid  to  railroad 
enterprises,  —  and  what  was  the  result?  The  State  of  Massachu¬ 
setts  invested  $18,000,000  in  the  Troy  &  Greenfield  Railroad,  and 
it  got  out  only  about  $6,000,000,  losing  two-thirds  of  its  invest¬ 
ment.  Fifteen  towns,  I  think,  in  the  western  part  of  the  State, 
which  invested  to  the  limit  of  their  ability,  lost  every  cent  they 
put  in  after  the  Commonwealth  foreclosed  its  mortgage ;  and  they 
have  been  down  here,  I  believe,  in  past  years,  to  ask  remuneration 
.  from  the  State  for  the  loss  of  their  investments.  More  than  one- 
half  of  the  gross  State  debt  of  Massachusetts  to-day  arises  out  of 
two  railroad  loans,  —  one  to  the  Troy  &  Greenfield  Railroad,  and 
the  other  to  the  Boston,  Hartford,  &  Erie. 

The  same  result  has  attended  the  granting  of  municipal  aid  to 
private  business  enterprises  elsewhere,  to  say  nothing  of  munic¬ 
ipal  ownership  and  management.  The  history  of  Bath,  Me.,  is 
so  melancholy  in  this  respect  that  I  cannot  refrain  from  making 


22 


special  reference  to  it.  Suffering  for  the  commonest  municipal 
necessities,  with  everything  at  loose  ends  and  out  of  repair,  they 
yet  for  years  taxed  themselves  $25  on  a  thousand  on  a  high  valua¬ 
tion  in  order  to  meet  the  interest  on  defaulted  railroad  bonds. 
The  State  of  Maine  made  the  mistake  of  permitting  Bath  and 
other  towns  of  that  Commonwealth  to  aid  the  Knox  &  Lincoln 
Railroad.  The  result  has  been  many  years  of  financial  embarrass¬ 
ment  and  distress.  The  report  of  a  special  committee  appointed 
to  attempt  to  fund  Bath’s  railroad  debt  pronounced  it  “a  terrible 
burden,”  and  referred  to  the  city’s  participation  in  the  enterprises 
as  “  fourteen  years  of  bitter  experience.”  These  cities  and  towns 
had  every  reason  to  believe  that  the  Knox  &  Lincoln  Railroad,  by 
connecting  them  together  and  putting  them  in  easy  communication 
with  other  places,  would  prove  to  be  a  genuine  boon  to  the  munic¬ 
ipalities  and  to  the  business  interests  located  in  them.  On  the 
contrary,  it  has  been  an  utter  failure,  and  has  resulted  in  imposing 
a  grievous  burden  of  municipal  indebtedness,  from  which  they 
have  not  been  able  to  free  themselves.  Some  of  the  towns  were 
at  last  driven  to  attempt  repudiation. 

This  has  been  the  history'  of  this  sort  of  thing  in  all  analogous 
cases  throughout  the  country.  If  the  lawyers  on  the  committee 
will  read  Judge  Dillon’s  statement  of  the  result  of  this  kind  of 
legislation  in  other  States,  the^v  will  be  struck  and  surprised  with 
the  uniformly  disastrous  results  which  have  accompanied  it.  He 
says  that  “  it  cannot  be  denied  that  this  species  of  legislation  has 
been  exceedingly  mischievous  in  its  results.”  In  summing  up  the  re¬ 
sults  of  municipal  aid  to  such  corporations,  he  says:  “Regarded 
in  the  light  of  its  effects,  there  is  little  hesitation  in  affirming  that 
this  invention  to  aid  the  enterprises  of  private  corporations  has 
proved  itself  baneful  in  the  last  degree.” 

I  have  here  a  citation  from  another  authority  (Cook  on  Stock 
and  Stockholders,  section  92),  where  the  unchecked  exercise  of 
this  power  of  municipalities  to  aid  enterprises  of  a  private  charac¬ 
ter  is  said  to  have  entailed  such  a  burden  of  taxation  that  in  many 
States  it  has  been  found  necessary  to  prohibit  it  by  constitutional 
prohibition.  He  says  :  — 

“  In  many  States  are  found  constitutional  prohibitions  rendering 
it  unlawful  for  municipal  corporations  to  make  subscriptions  or 
lend  their  credit  to  any  incorporated  company  or  enterprise  not 
strictly  and  exclusively  governmental  in  its  nature  and  constitu¬ 
tion.  This  is  the  case  in  Pennsylvania,  Ohio,  Illinois,  New  York, 


23 


Indiana,  Missouri,  Mississippi,  and  in  some  other  States.  In  gen¬ 
eral,  it  will  be  found  that  these  constitutional  provisions  prohibit 
in  terms  any  subscriptions  or  lending  of  credit  b\T  any  municipality 
in  the  State  or  by  the  State  itself  to  any  company,  association,  or 
corporation  whatsoever.” 

If  it  be  said  that  municipal  aid  to  railroad  corporations  is  not 
the  same  thing  as  municipal  operation  of  electric  light  and  gas 
plants,  it  will  be  admitted  ;  but  it  bears  close  analogy  to  them,  and 
the  dangers  are  the  same  in  both  cases.  Among  these  dangers 
is  the  creation  of  further  municipal  indebtedness. 

Increase  of  Municipal  Indebtedness. 

Section  3  of  the  act  which  you  have  before  3’ou  contem¬ 
plates  the  issue  of  bonds,  to  run  for  a  term  not  exceeding 
twenty  years,  at  not  more  than  five  per  cent.  The  aggregate 
amount  of  such  bonds  may  equal  five  per  cent,  of  the  total 
valuation  of  the  property  of  the  municipality,  and  the  indebted¬ 
ness  thereby  created  is  not  to  be  included  in  the  limitation  of 
indebtedness  of  the  city  or  town.  Let  me  read  again  from  Judge 
Dillon.  Speaking  of  municipal  indebtedness,  he  says  (sections 
154  and  155)  :  — 

“It  is  estimated  that  the  indebtedness  of  municipal  and  public 
corporations  in  this  country  has  already  reached  the  enormous  sum 
of  $1,000,000,000,  and  it  is  constantly  increasing.  A  large  por¬ 
tion  of  this  indebtedness  is  evidenced  by  negotiable  bonds  which 
are  held  by  thousands  of  persons  at  home  and  abroad  as  an  invest¬ 
ment.  These  bonds  have  been  issued  for  a  great  variety  of  pur¬ 
poses,  such  as  the  erection  of  public  buildings,  the  making  of 
municipal  improvements,  and  in  payment  of  subscriptions  for  the 
stock  of  railway  corporations,  or  as  donations  to  aid  them  in  the 
construction  of  their  roads  located  in  or  near  the  municipality  or 
public  corporation  thus  extending  its  assistance. 

“  The  power  conferred  upon  municipal  and  public  corporations 
to  issue  commercial  securities  for  such  purposes  is  of  compara¬ 
tively  recent  origin,  and  it  has  undeniably  been  attended  with  very 
serious,  and  it  is,  perhaps,  not  too  strong  a  statement  to  add,  dis¬ 
astrous,  consequences.  One  of  these  is  the  stimulus  which  the  long 
credit  commonly  provided  for  effectually  supplies  to  over-indebted¬ 
ness.  The  bonds  usually  fix  a  time,  twenty  or  thirty  years  distant, 
for  payment  of  the  principal.  Those  who  vote  the  debt  and  the 
councils  or  bodies  which  create  it  and  issue  the  bonds,  do  so  with- 


24 


out  much  hesitation,  as  the  burden  is  expected  to  fall  principally 
on  posterity.  A  learned  justice  of  the  Supreme  Court  of  the 
United  States  has  very  aptly  described  the  effect  witnessed  as  a 
mania  for  running  in  debt  for  public  improvements.  It  has  else¬ 
where  been  characterized  as  an  epidemic  insanity  inducing  extrava¬ 
gant  corporate  subscriptions  to  public  works.” 

No  matter  what  may  be  the  constitutional  foundations  for  this 
power,  the  result  of  the  application  of  it  has  been  nothing  but  dis¬ 
aster  wherever  the  experiment  has  been  tried. 

This  great  mountain  of  municipal  indebtedness  is  not  confined 
to  the  newer,  and  therefore  presumably  more  improvident,  portions 
of  our  country.  In  Massachusetts  the  municipal  indebtedness 
amounted,  in  1888,  to  upwards  of  $96,000,000,  and  to-day  it 
probably  constitutes  one-tenth  of  the  entire  municipal  indebtedness 
of  the  United  States.  I  read  from  a  pamphlet  prepared  by  Mr.  A. 
D.  Chandler,  in  1889,  called  “  Municipal  Control  of  Commercial 
Lighting.  Nationalism  Analyzed,”  which  is  a  mine  of  information 
upon  this  subject. 

General  Collins.  —  The  municipal  indebtedness  of  Massachu¬ 
setts  has  since  that  time  increased  about  $12,000,000. 

Mr.  Burdett. — In  Massachusetts.  And  that  will  bring  it  up 
to — 

General  Collins.  —  $108,000,000. 

Mr.  Burdett. — Mr.  Chandler  says,  “No  State  in  the  Union 
is  believed  to  have  so  large  a  debt  as  Massachusetts  ;  namely, 
$28,851,619.  And  the  city  and  town  indebtedness  of  no  State  in 
the  Union  is  so  large  in  proportion  to  its  population  as  that  of 
Massachusetts;  namely,  $96,756,916.  Here  is  a  total  public  in¬ 
debtedness  of  $125,608,535.  The  adoption  of  the  nationalist 
theory  would  point  the  way  to  an  enormous  increase  of  this  indebted¬ 
ness.  The  absorption  or  duplication  of  the  lighting  plants  alone 
would  require  over  $20,000,000.”  In  that  case  we  would  have  a  mu¬ 
nicipal  indebtedness  in  Massachusetts  of  $128,000,000;  decidedly 
more  than  ten  per  cent,  of  the  entire  municipal  indebtedness  of  the 
United  States.  It  was  true  at  the  time  this  pamphlet  was  written 
that  out  of  351  municipalities  in  Massachusetts  ten  had  an  indebt¬ 
edness  of  from  seven  per  cent,  to  nine  and  one-half  per  cent, 
on  their  valuation.  Danvers’  indebtedness  at  that  time  was 
seven  per  cent,  of  its  valuation ;  and  while  the  ratio  of  increase  in 
Danvers’  valuation  for  1888  over  1887  was  only  two  and  one-half 
per  cent.,  the  ratio  of  increase  of  its  total  liabilities  for  the  same 


25 


period  was  fourteen  per  cent.  I  have  not  had  an  opportunity  to 
bring  these  figures  down  to  the  present  date,  but  I  state  them  as 
of  the  time  employed  by  Mr.  Chandler. 

Corruption  of  the  Public  Service. 

The  necessary  enlargement  and  the  almost  inevitable  corruption 
of  the  public  service  which  would  follow  the  passage  of  acts  such 
as  we  have  under  consideration  is  in  and  of  itself,  to  the  minds  of 
conservant  thinkers,  a  sufficient  objection  to  the  legislation.  The 
question  is,  do  we  want  to  increase  or  decrease  the  official  classes 
in  the  United  States?  Do  we  want  to  have,  as  in  Germany  and 
France,  and  other  continental  countries,  about  every  third  man 
dressed  in  uniform  of  some  description,  belonging  to  either  the 
civil  or  the  military  department  of  the  public  service?  or  do  we 
want  to  have  things  left  more  as  we  have  had  them  in  the  past,  with 
the  people  governed  as  little  as  possible,  and  paying  for  as  small  a 
civil  list  as  possible  ?  The  difficulty  about  this  proposed  legislation 
is  that  it  is  starting  us  in  exactly  the  wrong  direction.  Up  to  this 
time  we  have  been  fleeing  from  centralization,  fleeing  from  the 
increased  power  of  government ;  and  yet  here  is  a  serious  proposi¬ 
tion  to  turn  around  and  go  in  just  the  opposite  direction.  Why, 
Mr.  Chairman,  is  it  not  beyond  dispute  that  we  are  what  we  are 
to-day  as  a  people,  and  our  industries  are  what  they  are  to-day  as 
industries,  because  we  have,  from  the  foundation  of  our  govern¬ 
ment,  practised  precisely  the  opposite  theories  from  those  em¬ 
bodied  in  this  bill?  We  have  practised  upon  the  idea  that  the 
more  we  encouraged  individual  enterprise,  the  better ;  the  more 
inducements  we  gave  for  the  investment  of  private  capital,  the  bet¬ 
ter  ;  the  less  we  had  to  do  with  government,  the  better.  And  our 
policy  has  wisely  gone  so  far  as  to  encourage  the  investment  of 
private  capital  in  corporate  form,  so  that  it  may  be  more  effec¬ 
tively  employed.  But  we  are  now  asked  to  take  the  first  step 
toward  surrendering  the  idea  of  individual  enterprise,  and  giving 
over  our  industries  to  be  managed  by  public  officers.  Let  them 
light  our  streets  and  supply  our  power  ;  then  let  them  run  our  street 
railroads,  and  absorb  our  telephones  and  telegraphs  ;  let  them  grad¬ 
ually  come  into  the  management  and  control  of  all  our  quasi-public 
enterprises,  and  we  shall  have  arrived  at  the  goal  of  nationalism. 
What  is  “  nationalism”?  I  understand  it  to  be  a  theory  of  gov¬ 
ernment  which  delegates  as  much  as  possible  to  the  government, 
and  leaves  as  little  as  possible  to  the  individual  —  a  theory  whibh 


26 


is  thoroughly  undemocratic,  unrepublican,  and  un American. 
And  there  is  no  disguise  of  the  programme.  Pending  before 
this  very  committee  there  are  petitions  for  the  enactment  of 
a  law  to  allow  cities  and  towns  to  make  light,  and  to  en¬ 
gage  in  all  other  la>rful  business  that  the  citizens  of  such  cities- 
and  towns  may  desire  to  enter  into.  There  is  a  petition 
now  pending  before  the  Committee  on  Labor  for  a  State  loan  of 
three  million  dollars  to  cities  and  towns  to  enable  them  to  build 
homes  for  the  people,  similar  to  State  loans  to  railroad  corpora¬ 
tions  to  build  their  railroads.  Before  the  Committee  on  Cities  the 
44  Nationalists’  League,”  which  I  presume  is  a  part  of  the  same 
organization  which  is  conducting  the  petitioner’s  case  before  your 
committee,  have  a  petition  pending  as  to  permitting  cities  to  erect 
dwelling-houses,  and  to  let  them  at  a  rental.  The  absorbing  of  the 
telephone  and  telegraph  lines,  the  running  of  the  street  railroads, 
the  management  of  the  express  service,  the  ownership  of  union 
depots,  and  so  on  and  so  forth,  are  but  successive  steps  in  the  same 
direction — in  the  direction  of  the  surrender  of  individualism,  and 
in  the  adoption  of  the  idea  of  paternalism.  But  was  it  not,  Mr. 
Chairman  and  gentleman,  because  our  fathers  objected  to  paternal 
forms  of  government,  that  they  left  their  homes  and  crossed  the 
sea,  to  establish  here  new  forms  of  government,  to  inaugurate  new 
industries,  and  to  lay  the  foundation  of  a  success  more  glorious 
than  was  possible  under  the  old  conditions? 

(Adjourned  to  Tuesday,  March  24.) 

Tuesday,  March  24,  1891. 

Upon  the  reassembling  of  the  committee,  Mr.  Burdett  pro¬ 
ceeded  as  follows  :  — 

Mr.  Chairman  and  Gentlemen, —  At  your  session  yesterday  I 
had  the  privilege  of  advancing,  in  behalf  of  the  electric-light 
companies,  such  reasons  against  this  legislation  as  seemed  to  me 
pertinent,  and  1  practically  closed  the  consideration  of  all  points 
that  I  desired  to  treat  upon,  with  one  exception, — the  question 
of  economy,  involving  the  question  of  electric-lighting  prices.  I 
referred  to  the  character  of  the  legislation,  to  its  broad  and 
sweeping  provisions,  to  the  revolutionary  idea  contained  in  those 
portions  of  it  which  look  to  the  embarking  of  the  towns  and  cities 
of  the  Commonwealth  in  hazardous  manufacturing  enterprises.  I 
next  referred  to  the  remonstrants,  to  their  number  and  character,  to 
the  history  of  their  business,  and  to  the  nature  of  their  objections. 


27 


In  considering  the  public  objections  to  the  pending  bill,  I 
insisted  that  it  was  contrary  to  our  theories  of  town  and  city 
government;  that  there  was  no  valid  analogy  between  any 
employment  now  undertaken  by  municipalities  and  the  manu¬ 
facture  and  sale  of  gas  or  electricit}’,  but  that  the  analogy  ran 
directly  the  other  way,  —  from  gas  and  electric  lighting  to  electric 
railroads,  electric  telephones,  electric  telegraphs,  and  other  indus¬ 
tries  of  a  quasi-public  character. 

In  connection  with  the  provision  of  the  bill  for  the  issue  of 
bonds  to  pay  for  municipal  plants  to  be  established  under  it,  I 
called  your  attention  to  the  increase  of  municipal  indebtedness 
which  it  would  necessitate.  I  pointed  out  in  this  connection  that 
municipal  aid  to  railroads,  which  is  the  closest  analogy  of  any¬ 
thing  we  have,  has  resulted  uniformly  and  universally  in  financial 
disaster  and  public  corruption. 

When  the  hearing  closed  yesterday,  I  was  discussing  the  effect 
of  the  necessary  enlargement  and  the  almost  inevitable  corruption 
of  the  public  service,  which  would  follow  this  legislation.  I  need 
add  nothing  to  what  I  have  already  said  upon  that  point,  except 
to  quote  from  the  great  work  on  “  Liberty  ”  by  John  Stuart 
Mill,  in  which,  referring  to  the  abuse  of  the  powers  of  government 
and  the  source  from  which  it  arises,  that  writer  says:  — 

“  The  mischief  begins  when,  instead  of  calling  forth  the  activity 
and  powers  of  individuals  and  bodies,  it  substitutes  its  own  activity 
for  theirs.” 

No  Economic  Advantages. 

The  only  excuse  for  the  proposition  which  is  before  you  is  the 
claim  that  the  public  purse  will  be  benefited  by  its  adoption.  No 
sober-minded  citizen  of  Massachusetts  can  fail  to  recognize  and 
admit  the  objections  to  the  scheme.  Nobody  but  a  “  nationalist  ” 
would  for  a  moment  pretend  that  this  legislation  was  not  sur¬ 
rounded  with  the  gravest  difficulties  and  uncertainties.  But  it  is 
claimed  that  towns  and  cities  can  get  their  lights  cheaper  under 
municipal  ownership  than  they  can  under  private  ownership.  But 
it  is  not  true.  And  if  anything  has  been  proved  before  you  in  these 
hearings,  that  has  been  proved.  Even  if  it  were  true,  it  would  make 
no  difference  to  one  entertaining  my  views  on  the  public  questions 
which  are  involved.  According  to  my  way  of  looking  at  the  sub¬ 
ject,  the  opportunity  for  a  city  or  town  to  make  or  save  a  few 
dollars,  more  or  less,  ought  not  to  induce  us  to  inaugurate  a 


23 


dangerous  experiment  and  revolutionize  all  our  theories  and 
ideas  of  town  and  city  government.  But  municipal  lighting 
is  not  cheaper  than  private  lighting.  In  the  first  place,  a 
city  or  town  cannot  produce  anything  cheaper  than  private 
capital  can  produce  it.  If  that  be  so,  the  municipalities  in 
Massachusetts  have  received  their  lights  up  to  this  time  at  a  fair 
price,  unless  the  corporations  have  made  a  large  and  undue  profit 
out  of  furnishing  them.  But  that  they  have  not  received  very 
much  advance  over  the  cost  of  production,  appears  from  the  undis¬ 
puted  figures  as  to  their  dividends  and  earnings  which  I  have 
given  you.  But  I  need  not  rest  my  case  upon  that  proposition, 
however  sound  it  may  be.  I  can  afford  to  enter  upon  a  careful 
study  of  the  figures  which  experience  has  furnished  us. 

The  community  has  been  misinformed,  misled,  miseducated  from 
the  beginning  until  now  upon  this  question  of  electric-lighting 
prices.  But  the  time  has  now  come  when  we  are  beginning  to  get 
at  some  of  the  facts  in  the  case.  Why,  think  of  what  has  been 
placed  before  this  committee  by  the  other  side,  as  affirmative  evi¬ 
dence,  to  show  that  electric  lights  can  be  produced  cheaper  by  a 
municipality  than  they  can  by  a  private  corporation  !  A  lot  of 
extracts  (not  at  the  time,  by  the  way,  credited  to  their  source) 
read  from  a  book  four  years  old,  which  the  author  has  since  repu¬ 
diated.  There  is  the  beginning  and  the  end  of  all  the  testimony 
which  has  been  submitted  upon  the  general  question  of  the  economy 
of  the  municipal  production  of  electric  lights.  The  man  who  wrote 
that  book,  said  in  Chicago,  two  years  ago,  according  to  the  testi¬ 
mony  before  you  :  — 

“  I  have  closely  studied  the  workings  of  almost  ever3T  city  plant, 
and,  with  but  one  or  two  exceptions,  I  would  not  now  commend 
their  operation.  The  officials  of  the  smaller  towns  where  munic¬ 
ipal  plants  have  been  installed  show  an  amount  of  crude  ignorance 
of  the  subject  that  is  truly  appalling.” 

That  is  all  I  have  to  say  about  the  extracts  from  Mr.  Whipple’s 
book,  which  have  been  put  in  here  in  lieu  of  testimon}'.  I  have 
something  more  serious  to  do  than  to  fire  shots  at  a  ghost  like 
that.  What  did  we  do?  We  produced  two  witnesses  who 
knew  what  they  were  talking  about,  —  Mr.  Francisco  and  Mr. 
Gilbert.  When  Mr.  Francisco  had  finished  his  testimony  you 
must  have  been  impressed  with  the  fact  that  for  the  first  time 
since  these  hearings  began  you  had  heard  some  real  testimony, 
and  had  begun  to  get  at  some  real  facts  as  to  the  cost  of  the 


29 


operation  of  the  municipal  plants  which  now  exist.  Our  friends 
on  the  other  side,  recognizing  the  force  of  it,  and  knowing  that  if  it 
stood  uncontradicted  their  claim  to  econom}'  was  gone,  sent  a  gen¬ 
tleman  up  to  Rutland  to  see  what  he  could  find  out.  He  found 
nothing  whatever  to  temper  the  force  of  Mr.  Francisco’s  testi¬ 
mony.  We  would  gladly  have  given  him  the  facts  if  he  had  asked 
for  them.  But  we  did  not  deem  them  at  all  material  to  this 
inquiry.  They  amount  simply  to  this,  that  a  ruinous  competition 
is  going  on  in  Rutland,  and  that  Mr.  Francisco’s  company  is  fur¬ 
nishing  lights  at  much  less  than  the  cost  of  production,  and  is 
determined  to  furnish  them  for  nothing,  if  necessary,  rather  than 
to  be  driven  out  of  the  field  by  unfair  means. 

I  shall  not  attempt  to  go  over  Mr.  Francisco’s  testimony  in  de¬ 
tail.  He  took  up  every  case  that  was  cited  on  the  other  side,  and 
showed  what  the  actual  cost  has  been  to  produce  electric  lights 
under  municipal  ownership  in  the  various  places.  After  disposing 
of  all  the  places  to  which  attention  had  been  called  upon  the  other 
side,  he  took  up  other  prominent  instances,  like  Chicago,  III., 
Easton,  Pa.,  Xenia,  O.,  and  other  places.  Unfortunately,  Mr. 
Gilbert  had  not  at  that  time  worked  out  this  “  table  with  unit,”  so 
called,  which  furnishes  us  such  an  exact  measurement  of  the  amount 
of  light  obtained  in  different  places  for  the  same  amount  of  money. 
If  that  had  been  done,  we  could  have  applied  it  to  the  places 
named  by  Mr.  Francisco,  by  eliciting  the  particular  facts  necessary 
for  its  application.  But  in  a  few  places  the  application  can  be 
made.  Let  us  take,  for  example,  the  first  place  that  was  named 
upon  the  other  side  —  Ba}'  City,  Mich.  Let  us  see  if  wre  can  get 
at  the  facts.  The  lights  in  that  city  burn  2,421  hours  per  year,  at 
a  cost  of  $93.20  per  lamp,  or  at  the  rate  of  3.85  cents  per  lamp 
per  hour.  Dividing  the  nominal  candle-power  of  the  lights  by  the 
price  per  hour,  we  obtain,  as  the  amount  of  light,  measured  in 
nominal  candle-power,  obtained  in  one  hour  for  one  cent,  five  hun¬ 
dred  and  nineteen.  Compare  this  result  with  that  obtained  in 
Boston,  one  of  the  most  expensive  places  in  the  United  States 
in  which  to  furnish  electric  lights,  for  the  various  reasons  given 
by  Mr.  Gilbert.  In  Boston  coal  costs  the  company  $3.89 
a  ton  and  upwards.  In  Bay  Cit}T,  the  city  buys  all  the  shav¬ 
ings  needed  to  run  their  steam  plant  for  a  year  for  $1,200; 
while  coal  formerly  cost  them  more  than  twice  that  sum.  And 
yet,  notwithstanding  the  differences  in  favor  of  Bay  City,  she 
gets  only  519  candle-power  per  hour  for  one  cent,  while  Boston 


30 


gets,  under  contract  at  forty  cents  per  light,  540  candle-power  per 
hour  for  one  cent. 

Now,  take  Lewiston,  for  example.  That  is  a  municipal  plant 
run  by  water-power.  Without  stopping  to  examine  the  figures, 
let  me  refer  to  a  portion  of  Mr.  Francisco's  statement,  which  fur¬ 
nishes  an  excellent  illustration  of  how  the  figures  about  the  cost 
of  the  operation  of  municipal  plants  are  frequently  arrived  at.  He 
says  :  — 

‘‘Another  feature  of  Lewiston  is,  that  in  the  itemized  account 
[of  operating  expenses]  there  are  fifty  or  more  different  expendi¬ 
tures,  ranging  from  fifty  cents  to  $2,584,  and  yet  there  is  no  men¬ 
tion  made  of  any  description  of  five  items  that  go  to  make  up  a 
considerable  proportion  of  the  cost  of  lighting  in  well-regulated 
companies ;  namely,  power,  interest  on  cost  of  plant,  insurance, 
taxes,  or  depreciation.  That  does  not  appear  in  any  form  there 
among  those  items.” 

Just  think  of  it !  Think  of  people  giving  out  figures  as  the  cost 
of  production  and  omitting  therefrom  the  items  of  power, 
interest,  insurance,  taxes,  and  depreciation  ! 

That  they  have  no  necessary  surplus  machinery  appears  from  * 
the  last  report  of  the  superintendent,  in  which,  after  speaking  of 
the  necessity  of  enlarging  the  station,  he  says  :  “  But  whether  the 
station  is  enlarged  or  not,  we  need  an  extra  dynamo  to  use  in  case 
of  accident,  which  is  liable  to  happen  at  any  moment,  leaving  part 
of  the  city  in  darkness.” 

The  superintendent  says  in  another  part  of  his  report:  “In 
fact,  the  whole  plant,  poles,  wires,  lamps,  and  dynamos,  will  need 
reconstruction  before  the  end  of  two  years.” 

And  that  plant  has  only  been  in  operation  for  about  three  years 
now  1 

Take  the  case  of  Hannibal,  Mo.,  as  another  illustration. 
Street  lights,  according  to  Mr.  Francisco’s  figures,  cost  $101,  and 
private  lights  $91.71.  Owing  to  a  lack  of  necessary  surplus  ap¬ 
paratus,  the  streets  were  left  in  darkness  upon  five  occasions,  — 
three  times  by  the  lightning,  and  twice  by  the  burning  out  of 
armatures.  The  mayor  characterized  the  burning  out  of  the 
armatures  as  an  accident  happening  through  ignorance  and  care¬ 
lessness.  For  how  long  the  loss  of  service  was  continued  upon 
any  of  these  occasions  we  are  not  informed.  Such  service 
would  not  be  tolerated  in  the  case  of  a  company  supplying  lights 
by  contract. 


31 


Now,  what  are  the  facts  about  Chicago,  where  we  are  asked  to 
believe  that  the  public  lights  cost  the  city  only  nineteen  cents? 
The  fact  is,  that  they  cost  about  thirty-five  cents,  as  Mr. 
Francisco’s  figures  proved  conclusively.  Coal  costs  only  $1.33 
a  ton  in  Chicago,  as  against  $3.89  and  upwards  in  Boston.  Upon 
the  Chicago  superintendent’s  own  figures,  with  the  addition  of 
the  items  of  water  tax,  interest  on  investment,  loss  of  taxes, 
insurance,  depreciation  at  five  per  cent,  salaries  and  office-rent, 
the  cost  amounts  to  34.9  cents  per  light  per  night.  The  city 
superintendent  of  the  electric  lights  in  Chicago  frankly  states, 
whenever  asked,  and  has  so  stated  in  several  communications 
which  are  public  property,  that  in  the  figures  given  out  from 
Chicago  there  are  never  included  the  items  above  named,  or  oil, 
waste,  repairs,  or  like  charges. 

How  about  Topeka?  The  gentleman  who  has  conducted  the 
case  of  the  petitioners  saw  fit  to  read  about  six  lines  of  a 
letter  from  the  Mayor  of  Topeka,  not  informing  us  that  he  was 
omitting  about  six  times  as  much.  That  was  his  idea  of 
fairness,  I  suppose.  We  did  not  know  the  fact  until  Mr.  Fran¬ 
cisco  came  here  and  told  us  of  it.  Under  date  of  Feb.  12, 
1890,  the  Mayor  of  Topeka,  referring  to  the  municipal  electric-light 
plant,  said,  We  think  we  have  got  rather  a  bad  bargain. 

Our  lights  so  far  have  been  very  unsatisfactory.  My  own  opinion 
of  the  matter  is  that  it  would,  no  doubt,  be  much  cheaper  in  the 
end  for  the  city  to  have  contracted  with  some  of  our  electric-light 
companies  here  to  furnish  the  city  with  its  lights  at  so  much  per 
light  per  month.  We  would  then  have  known,  at  least,  just  what 
they*  cost.”  He  concludes  by  saying,  “  We  have  found  ours  a 
very  expensive  luxury,  and  there  are  so  many  expenses  coming 
up  that  we  cannot  foresee.” 

Now,  let  me  take  a  final  and  very  striking  instance,  which  fur¬ 
nishes  a  comparison  which  is  perfectly  fair  in  every  respect,  — 
the  cities  of  Marietta,  O.,  and  Parkersburg,  W.  Va.  They  are 
situated  about  twelve  miles  apart,  on  opposite  sides  of  the  Ohio 
river.  They,  undoubtedly,  obtain  coal  at  substantially  if  not 
exactly  the  same  price,  and  all  the  local  conditions  are  the  same  ; 
they  get  the  same  light,  the  same  kind  of  light,  as  I  understand 
the  testimony’.  In  the  case  of  Marietta,  where  there  is  a  munici¬ 
pal  plant,  the  light  costs  at  the  rate  of  4.5  cents  per  hour ;  in  the 
case  of  Parkersburg,  where  the  light  is  furnished  by  a  private 
corporation,  it  costs  them  only  2.6  cents  per  hour. 


32 


I  now  come  to  the  consideration  of  the  testimony  of  Mr.  Gilbert, 
another  man  who,  as  everybody  will  concede,  knows  what  he  is 
talking  about  when  he  is  dealing  with  electric-lighting  matters. 
He  made  himself  thoroughly  conversant  with  the  facts  and  figures 
as  to  the  municipal  plants  in  Bangor,  Me.,  and  Danvers,  Mass., 
because  these  are  both  near  at  hand,  and  are  both  advertised  far 
and  wide  throughout  the  country  as  shining  illustrations  of  the 
success  of  municipal  control. 

Bangor. 

In  the  case  of  Bangor  it  is  claimed  that  the  city  lights  are  pro¬ 
duced  at  a  cost  of  twelve  and  three-fourths  cents  per  light  per 
night.  Now,  what  is  the  fact  about  it?  Upon  their  own  figures, 
corrected  as  I  shall  indicate,  the  cost  of  producing  their  lights  by 
water-power  is  24.6  cents  per  light  per  night ;  and,  when  reduced 
to  a  steam  basis,  the  cost  is  40.14  cents  per  light  per  night.  As 
to  the  character  of  the  service  there,  you  have  had  some  evidence. 
My  information  is  that  it  is  very  poor.  But  whatever  the  service 
is,  the  cost  is  not  12f  cents,  but  24.6  cents  by  the  use  of  water¬ 
power,  and  40.14  cents  on  a  steam-power  basis.  In  arriving  at 
these  results,  Mr.  Gilbert  did  not  take  into  his  calculation  anything 
for  surplus  apparatus,  which  ought  to  be  from  10  to  20  per  cent., 
according  to  all  the  testimony  you  have  before  you,  nor  make  any 
allowance  for  damages,  either  to  persons  or  property,  or  in  patent 
litigation,  nor  reckon  in  anything  for  the  use  of  water-power, 
although  the  water  department  of  the  city  of  Bangor  charges 
every  other  department  large  sums  for  water ;  nor  did  he  reckon 
any  interest  on  any  portion  of  the  water  plant  or  upon  the  build¬ 
ing,  or  anything  for  rental,  either  of  power  or  of  the  premises. 
He  simply  added  interest  on  the  investment,  at  the  same  rate  they 
pay  on  their  city  bonds,  loss  of  taxes  at  the  city  rate,  depreciation 
at  five  per  cent.,  and  a  very  small  item  for  insurance,  with  the 
result  which  I  have  stated. 


Danvers. 

Now  we  come  to  the  case  of  Danvers,  the  model  near  at  hand 
which  is  held  up  before  us.  This  plant  has  been  run  by  the  mu¬ 
nicipality  for  several  years,  not  only  for  their  own  convenience, 
but  for  the  purpose  of  demonstrating  to  Massachusetts  and  to  the 
world  that  a  municipality  can  produce  its  lights  cheaper  than  a 


33 


private  corporation.  Everything  is  favorable  for  their  experiment. 
They  have  no  $110  poles,  such  as  we  have  to  have  here  in  Bos¬ 
ton  ;  and  no  $350  roof  structures  to  build  and  maintain.  They 
use  poles  and  trees  in  the  public  streets  without  limit  and  without 
price,  and  have  otherwise  prosecuted  their  business  under  the  most 
favorable  conditions.  If  Danvers  fails,  their  whole  case  fails. 
Now,  how  can  we  get  at  the  facts  of  the  case  ?  In  the  first  place,  we 
must  find  some  common  unit  of  measurement,  some  yardstick  that 
will  measure  just  so  much  and  no  more  wherever  it  is  used.  And 
we  have  found  it.  I  refer  to  this  little  u  table  with  unit,”  which 
has  been  prepared  by  Mr.  Gilbert.  It  should  be  thoroughly  under¬ 
stood  by  every  member  of  your  committee.  It  is  made  up  by 
taking  the  yearly  cost  of  a  lamp,  which,  of  course,  can  be  readily 
arrived  at,  and  dividing  that  cost  by  the  number  of  hours  it  burns 
during  the  year.  That  gives  us  the  cost  per  hour  of  each  light. 
Then,  dividing  the  nominal  candle-power  of  the  light  by  the  cost 
per  hour,  we  get  the  amount  of  light,  measured  in  candle-power, 
that  can  be  obtained  in  one  hour  for  one  cent.  Suppose,  for 
example,  that  the  nominal  candle-power  of  your  lamp  is  2,000, 
and  that  it  costs  you  four  cents  per  hour,  you  would  be  getting 
for  one  cent,  for  the  same  length  of  time,  2,000  divided  by  4,  or 
500.  That  is  mathematically  exact,  and  is  fair  for  everybody. 

I  take  pleasure  in  handing  to  the  committee  copies  of  the 
“  table  with  unit,”  which  I  refer  to. 

(Mr.  Burdett  at  this  point  submitted  copies  of  the  following 
table.) 


34 


Table  with  Unit. 


Burning  Every 
Night  in  the 
Year. 

Total 
Hours 
Burned 
per  Year. 

Average 
Hours 
Burned 
per  Night. 

Nominal 

Candle- 

Power. 

Price 

per 

Year. 

Price. 

per 

Night 

Price 

per 

Hour. 

Candle-Power 
furnished  per 
Hour  for  One 
Cent. 

All  Night, 

3,939 

10  h.  48  m. 

2,000 

$219  00 

.60 

3594 

do. 

do. 

do. 

1,200 

219  00 

.60 

2154 

do. 

do. 

do. 

2,000 

200  75 

.55 

3921 

do. 

do. 

do. 

1,200 

200  75 

.55 

235g 

do. 

do. 

do. 

2,000 

182  50 

.50 

•o*4 

4324 

do. 

do. 

do. 

1,200 

182  50 

.50 

•o*4 

2594 

do. 

do. 

do. 

2,000 

164  25 

.45 

•o*4 

4794 

do. 

do. 

do. 

1,200 

164  25 

.45 

.044 

287| 

do. 

do. 

do. 

2,000 

146  00 

.40 

.03  io 

5404 

do. 

do. 

do. 

1,200 

146  00 

.40 

•03  h 

3244 

Dusk  to  1  A.M. 

2,490 

6  h.  49  m. 

2,000 

127  75 

.35 

•05| 

389-4 

do. 

do. 

do. 

1,200 

127  75 

.35 

•05g 

234 

do. 

do. 

do. 

2,000 

109  50 

.30 

.04|- 

4544 

do. 

do. 

do. 

1,200 

|  109  50 

.30 

•04f 

272| 

do. 

do. 

do. 

2,000 

91  25 

.25 

.03| 

5454 

do. 

do. 

do. 

1,200 

91  25 

.25 

•03f 

3274 

Dusk  to  12  M. 

2,125 

5  h.  49  m. 

2,000 

127  75 

.35 

.06 

3334 

do. 

do. 

do. 

1,200 

127  75 

.35 

.06 

200 

do. 

do. 

do. 

2,000 

109  50 

.30 

.051 

387 

do. 

do. 

do. 

1,200 

109  50 

.30 

.051 

2324 

do. 

do. 

do. 

2,000 

91  25 

.25 

•°¥o 

465 

do. 

do. 

do. 

1,200 

91  25 

.25 

•°¥o 

279 

*Danvers,  Mass. 

1,339 

4  h.  51  m. 

1,200 

$69  52 1 

.271 

4 

.05| 

2134 

t  Danvers,  Mass. 

1,236 

do. 

1 

1,200 

1 

62  57 

.24b 

237 

*  First  13  months  to  Feb.  1,  1890,  276  nights. 

f  12  months,  ending  Feb.  1,  1891,  255  nights. 

The  above  figures  on  Danvers  were  taken  from  the  Danvers  Town  Reports,  including 
items  charged  in  Lighting  account ,  Miscellaneous  account ,  and  Auditor's  report,  which  dis¬ 
tinctly  state  were  for  Electric  Lighting,  to  which  is  added  Town’s  loss  of  taxes  and  5  per 
cent,  depreciation. 

Moonlight  schedule  not  figured,  opinions  varying  as  to  nights  or  hours  required. 


1 


35 


Danvers  puts  up  with  a  service,  so  far  as  the  hours  of  burning 
are  concerned,  which  no  town  or  city  is  content  to  receive  from  a 
private  corporation.  They  get  a  service,  according  to  their  own 
reports,  of  only  1,236  hours  in  a  year.  The  least  that  cities  and 
towns  obtain  by  contract  is  2,125  hours,  where  lights  burn  every 
night  from  dusk  till  midnight.  But,  leaving  that  aside,  and 
assuming  that  Danvers  gets  just  as  much  light,  and  just  as  good 
light,  as  anybody  else,  what  does  it  cost  her?  The  following 
figures  are  taken  from  Mr.  Gilbert’s  testimony.  He  obtained  them 
all  from  the  town  reports  of  Danvers.  He  has  taken  no  items  ex¬ 
cept  such  as  unquestionably  apply  to  the  electric-lighting  account, 
and  he  has  added  nothing  to  them  except  depreciation  and  loss  of 
taxes.  Interest  is  included  in  the  municipal  report.  The  plant 
was  started  January  2,  1889. 

First  report,  Jan.  2,  1889,  to  Feb.  1,  1890:  — 


Bills  paid  to  Feb.  1,  1889  .....  $491  07 

Maintenance  for  year  to  Feb.  1,  1890  .  .  .  3,815  81 

Committee’s  services  and  expenses  ....  184  17 

Insurance  .  .  .  .  .  .  .  .  162  50 

Lawyer’s  fees  ........  174  17 

Printing  .........  51  75 

Liabilities  ;  committee’s  services  ....  80  00 

A.  H.  Merrill,  team  .......  4  00 

J.  Frank  Dale,  expenses  .  .  .  .  .  20  06 

D.  N.  Crowley,  legal  services  .  .  .  .  .  25  00 

To  which  are  added  :  — 

Taxes  on  investment,  at  town  rate,  for  thirteen  months,  260  50 

Depreciation,  at  five  per  cent.,  for  thirteen  months  .  812  50 


Total . $6,081  53 

Less  supplies  on  hand  ......  583  00 


Total  actual  cost . $5,498  53 


Number  of  street  lights  (excluding  the  two  in  the  station,  which 
would  not  be  paid  for  by  the  town  under  the  contract  system),  73  ; 
nominal  candle-power,  1 ,200.  Number  of  hours  burned  in  thirteen 
months,  1,339. 


36 


Reduced  to  basis  of  twelve  months,  or  1,236  hours,  gives  as 
yearly  cost  per  lamp,  $69.52-1,  Qr  at  the  rate  of  5§  cents  per  lamp 
per  hour.  Reduced  to  nominal  candle-power  per  hour  for  one 
cent,  the  result  is  213^  candle-power. 

These  items  are  all  in  the  town  reports,  but  they  are  not  found 
together.  They  have  not  kept  their  electric-light  account  so  that 
you  can  see  all  the  items  of  cost  and  maintenance  at  a  glance. 
Mr.  Gilbert  was  obliged  to  go  through  all  the  accounts  in  the  town 
report,  and  pick  out  those  items  which  related  to  electric  lighting. 
But  no  single  item  has  been  taken  which  has  not  the  electric-light 
ear-marks  on  it,  unmistakably  ;  every  item  that  is  doubtful  is 
left  out. 

Second  report,  Feb.  1,  1890,  to  Feb.  1,  1891  :  — 

Cost  as  per  superintendent’s  report,  less  supplies  on 


hand  ........  $3,419  79 

F.  H.  Caskins,  services  and  expenses  .  .  .  100  00 

J.  T.  Lynch,  services  ......  23  00 

Samuel  C.  Putnam,  services  ....  25  00 

A.  F.  Hayward,  care  of  electric  lights  .  .  .  10  00 

Add:  — 

Loss  of  taxes,  at  town  rate  .....  240  00 

Depreciation,  at  5  per  cent.  .....  750  00 


Total  actual  cost  .....  $4,567  79 


Number  of  street  lamps,  73;  nominal  candle-power,  1,200. 
Number  of  hours  of  burning,  1,236.  Price  per  year,  $62.57. 
Price  per  hour,  5^  cents.  Nominal  candle-power  per  hour  for 
one  cent,  237. 

Now,  if  you  will  take  that  result  and  compare  it  with  this 
“  table  with  unit,”  you  will  find  that  the  only  substantial  equiva¬ 
lent,  elsewhere,  of  the  Danvers  cost,  is  where  a  town  or  city  gets 
1,200  candle-power  lights  from  a  private  corporation  till  midnight 
at  about  thirty  cents  per  light.  According  to  this  table,  the  neigh¬ 
boring  city  of  Salem  gets  from  the  local  company,  at  forty-five 
cents  per  light  for  an  all-night  light  of  2,000  candle-power,  about 
twice  as  much  light  per  hour  for  one  cent  as  Danvers  does. 

An  objection  was  made  here  the  other  day  about  which  I  desire 
to  speak  for  a  moment  at  this  time.  It  was  asked,  “  Have  you 


< 


37 


taken  any  other  place  just  like  Danvers,  where  the  days  and 
hours  of  burning  are  just  the  same,  and  made  the  same  figures  ?” 
The  answer  was,  “  No  ;  because  it  is  impossible  to  do  so  ;  no  other 
place  getting  its  light  by  contract  gets  so  few  hours  of  burning 
as  does  Danvers.” 

Biit  what  can  be  done?  We  can  take  the  actual  burning  hours 
of  any  other  place,  and  it  will  do  as  well,  as,  of  course,  it  is 
simply  a  matter  of  proportion.  You  will  remember  that  I  asked  the 
treasurer  of  the  Salem  Company  what  the  average  burning  hours 
of  his  street  lights  are,  and  he  said  ten  hours  and  a  half.  Salem, 
therefore,  burns  her  street  lights  3,832  hours  per  year,  which,  at 
forty-five  cents  a  night,  gives  a  cost  of  $164.25  per  3rear,  or  at 
the  rate  of  4.28  cents  per  light  per  hour  ;  which,  reduced  to  candle- 
power  per  hour,  gives  us  467.29  candle-power  per  hour  for  one 
cent.  So  that,  taking  the  exact  state  of  facts  in  Danvers,  and 
the  exact  state  of  facts  in  Salem,  we  find  the  difference  is  almost 
two  to  one  in  favor  of  the  private  plant  in  Salem.  This  means 
that  the  Salem  Electric  Light  Co.,  if  Danvers  were  near  by, 
could  safely  supply  Danvers  with  the  same  quality  and  amount  of 
light,  by  actual  measurement,  as  it  now  gets,  at  a  little  more  than 
half  the  present  cost  to  Danvers. 

The  Chairman.  —  I  want  to  ask  you  one  question.  Is  the  cost 
per  light  in  Salem  figured  out  on  the  basis  of  all-night  burning? 

Mr.  Burdett.  —  Yes,  sir ;  from  the  actual  burning.  There 
would  be,  in  that  case,  I  suppose,  some  deduction  to  be  made. 
Let  us  see.  You  would  add  to  the  Danvers  price,  if  I  remember 
correctly,  about  50  per  cent,  for  all-night  service,  and  that  would 
be  at  the  rate  of  forty-five  cents  a  night  for  what  Danvers  gets  — 
that  is,  a  1,200  candle-power  lamp,  as  against  a  2,000  candle- 
power  lamp  in  Salem.  She  is  paying  at  the  same  rate  for  an 
inferior  article  as  Salem  is  for  the  best  article. 

The  Chairman.  —  I  wanted  to  ask  that  question.  I  think  that 
is  all. 

Mr.  Burdett.  —  We  do  not  claim  that  it  costs  twice  as  much  to 
run  all  night  as  it  does  to  run  until  twelve  o’clock.  I  think  the 
testimony  is  undisputed  that  it  costs  at  least  50  per  cent.  more. 

The  Chairman.  — That  is  all  the  question  I  have. 

Mr.  Burdett. — Consider  one  other  thing  in  this  connection, 
which  is  significant.  Look  at  the  report  of  the  Gas  and  Electric 
Light  Commissioners,  and  ascertain  what  various  cities  and  towns 
now  pay  by  contract  for  substantially  the  same  kind  and  quantity 


38 


of  light  as  they  get  in  Danvers.  I  find  thirty-one  towns  and 
cities  in  Massachusetts  which  are  supplied  with  1,200  candle- 
power  lights  on  the  midnight  schedule,  burning  under  substantially 
the  same  conditions,  as  I  understand  them,  that  they  are  burning 
the  lights  in  Danvers.  And  the  average  price  paid  by  contract  in 
those  thirty-one  cities  and  towns  is  twenty-six  cents  per  lamp  per 
night,  or  four  cents  less  than  the  municipal  cost  of  production  in 
Danvers. 

I  have  now  stated  all  the  considerations  upon  this  subject 
which  I  think  are  of  prime  importance.  But  I  desire  to  pay  some 
attention  to  the  petitioners,  and  I  will  do  so  in  a  very  few  words 
in  closing.  There  is  not  a  single  town  or  city,  except  Danvers, 
which,  according  to  my  recollection,  comes  here  with  a  real 
grievance.  Danvers  is  in  a  position  where  it  needs  help  of  some 
kind.  They  have  assumed  the  law  to  be  what  it  is  not,  and  the 
result  is  that  they  have  a  certain  number  of  bonds  outstanding 
which  are  to-day  not  worth  the  paper  they  were  written  on. 
I  have  nothing  to  say  against  a  law  to  legalize  the  bonds  issued 
by  the  town  of  Danvers.  But  that  is  no  reason  why  Danvers,  or 
any  other  town,  should  be  allowed  to  go  farther  than  she  has 
already  gone  and  embark  in  the  business  of  manufacturing  and 
selling  electricity.  To-day,  the  citizens  of  Danvers  have  a  strictly 
municipal  plant,  which,  like  honest  men,  they  want  to  pay  for, 
and  which  is  not  paid  for  in  the  securities  which  have  heretofore 
been  issued.  But  if,  as  a  matter  of  expediency  and  exigency,  you 
should  legalize  these  securities,  there  is  no  reason  why  the  whole 
theory  and  practice  of  Massachusetts  town  government  should  be 
upset. 

As  I  reside  in  Brookline,  I  may  be  pardoned  for  referring  to 
the  position  of  that  town  for  a  moment.  They  have  not  peti¬ 
tioned,  and  in  my  judgment  they  never  will  petition,  for  any  such 
law  as  is  embodied  in  the  bill  before  you.  Their  petition  is  that 
the  Legislature  will  pass  u  a  proper  law,”  giving  to  cities  and 
towns  of  the  Commonwealth  a  right  to  manufacture  and  supply 
themselves  with  electric  lights  for  municipal  purposes  only.  They 
have  not  for  a  moment  considered  the  proposition  of  allowing,  the 
town  of  Brookline,  with  its  vast  property  interests,  to  go  into  the 
hazardous  business  enterprise  of  manufacturing  and  selling  gas 
and  electricity  for  commercial  purposes. 

The  city  of  Boston  has  not  been  represented  here.  One  of  the 
members  of  the  Common  Council,  an  excellent  gentleman,  whose 


< 


39 


personal  acquaintance  I  have  the  honor  to  enjoy,  gave  you  his 
ideas,  but  expressly  disclaimed  any  official  character  as  a  witness. 
He  gave  certain  estimates  of  the  probable  cost  of  a  municipal 
electric-light  plant  in  Boston.  It  turned  out  that  his  figures  were 
furnished  by  a  corporation  which  was  subsequently  involved  in 
patent  litigation,  the  result  of  which  was  that  the  machinery  man¬ 
ufactured  and  supplied  by  it  was  adjudged  to  be  an  infringement 
of  certain  letters-patent,  and  the  further  use  of  which  was  enjoined 
by  the  courts  of  the  United  States.  What  an  investment  that 
would  have  been  for  Boston  ! 

I  do  not  feel  that  I  am  justified  in  imposing  upon  the  committee 
any  further  consideration  of  the  special  features  existing  in  the 
cases  of  the  several  petitioning  municipalities.  I  have  thought  I 
could  better  employ  my  time  in  suggesting  the  general  objections 
which  obtain  to  the  legislation  that  is  proposed.  These  objections 
apply  equally  well  to  special  and  general  legislation,  for  if  you  per¬ 
mit  one  town  to  go  into  this  business,  how  can  you  deny  the  right 
to  others?  The  real  question  for  you  to  decide,  gentlemen,  is 
whether  you  will  take  this  step  backwards  ;  and  if  you  think  it  is 
undesirable  to  do  so,  you  ought  to  meet  the  issue  squarely,  help¬ 
ing  Danvers  out  of  her  difficulty,  if  it  can  be  done  without  vio¬ 
lating  the  general  principle  involved,  and  let  the  other  petitioners 
have  leave  to  withdraw. 


